Group Decision and Negotiation, 2005
July 10–13, 2005. University of Vienna, Vienna, Austria
Shamel Addas, Eva Chen
and Rustam Vahidov,
"Factors Influencing the Pre-adoption of Electronic Negotiation Systems"
The growth of electronic negotiation is the result of emerging business models that
aim to capture differentiated pricing mechanisms made possible in today’s dynamic Information age.
However, the actual usage of electronic negotiation systems (ENS) has remained mostly academic.
In order to understand how organizations would adopt these systems, this study proposes a conceptual
framework based on past literature such as technology acceptance model (TAM), theory of planned behaviour
and task-technology-fit model. The investigation also focuses on using prototypes of ENS to examine
the contingency between negotiation support and negotiation complexity as these impact cognitive
responses on pre-acceptance, which ultimately affect the behavioural intention to use ENS by organizations.
"Configurable E-Negotiation Systems: Solutions and Perspectives"
B2B e-negotiation is the process of conducting negotiations between business partners
using electronic means. The interest in e-negotiation is motivated by its potential to provide business
partners with more efficient processes, enabling them to draft better contracts in less time. There are
three categories of e-negotiation systems:
(1) negotiation support systems assist users with communication and
decision-making activities; (2) negotiation software agents replace users in their communication and decision-making
activities; and (3) e-negotiation media provide a platform that implements a negotiation protocol.
There are two categories of e-negotiation media: servers which implement multiple negotiation protocols,
and applications which implement a single protocol. Traditionally, applications have dominated
negotiation design, but lately, the importance of servers has increased, and a need for configurable
servers is being felt.
Numerous attempts were made to design configurable servers to support more than one negotiation protocol.
Some of these attempts are: the AuctionBot which supports the configuration of various auctions; GNP
which separates auction specifications from the logic of the server; and eAuctionHouse which allows for
the configuration of auctions with the help of an expert system. Recently, Kersten et al.
designed a configurable negotiation server that supports bargaining, based on a process model
which organizes negotiation activities into phases; and a set of rules that govern the processing,
decision-making, and communication. The main problem in designing e-negotiation systems, let alone
configurable ones, is the lack of a systematic approach. Indeed, to this day, design has been a
We propose a new model for configurable negotiation-enabled e-marketplaces. In this model,
“e-negotiation media” is the e-marketplace where human and software participants meet to negotiate deals.
The e-marketplace enforces negotiation protocols, and therefore should make these protocols available for
consultation (by humans), and for automation purposes (by “negotiation software agents”). Separating the
protocols from the e-negotiation media is a first step towards a configurable e-marketplace.
Separating negotiation strategies from protocols will also give flexibility to the design of
negotiation software agents. The design of e-marketplaces will have a direct effect on the design
of negotiation software agents.
The proposed model can be roughly described as follows: (1) negotiation protocols are designed, formally
specified, and made available to the e-marketplace; (2) negotiation strategies are designed,
formally specified, and made available to the negotiation software agent; (3) the e-marketplace
configures the negotiation using the protocol; (4) the negotiation software agent obtains the protocol
from the e-marketplace and uses it along with the negotiation strategies to configure a negotiating
instance; and finally (5) automated negotiation takes place.
The first part of the paper will be dedicated to a study of past and current efforts in designing
configurable e-negotiation systems. The second part will introduce our new model for a configurable
e-marketplace capable of supporting multiple negotiation protocols. In the third part we will discuss
future trends in e-negotiation media.
Jamshid Etezadi, Gregory E. Kersten and Rudolf Vetschera,
"User Assessment of Internet-Based Negotiation Support Systems: A Confirmatory
In 2003 Vetschera, Kersten and Koeszegi conducted a study of over 2000 students
and professionals who used the Inspire e-negotiation system. They proposed
an assessment model for Internet-based systems (AMIS) to analyze factors
leading to a high user acceptance of the technology exemplified by Inspire.
This paper presents a follow up study that aims at the verification of AMIS
and the empirical results. The focus is on the verification of the users’ assessment
of the system influence on their intention to use a system, their clear distinction
between the two main facilities of Inspire: the communication platform and
the analytical tools, and the cultural differences in the system assessment.
The dataset which is used in this study includes over 5,000 cases and additional
information extracted from the negotiation transcripts.
Jamshid Etezadi, Haitham Tamim and
Determinants of Satisfaction in E-negotiations as perceived by Inspire Users"
Globalization of economy and proliferation of Internet trading,
necessitate an increase in the usage of e-negotiation systems as a viable alternative
to the face-to-face negotiations. This study utilizes structural equation modeling (SEM)
techniques to verify determinants of satisfaction with Inspire e-negotiation system.
Using the available databank in the Inspire, the direct and indirect effects of a
variety of factors including background knowledge and experience, ease of use, and
system characteristics on satisfaction is assessed for both English and non-English
speakers. The findings of this study can serve as an empirical base for design and
improvement of e-negotiation systems and particularly that of Inspire.
"Procurement via Continuous-Time Multi-Attribute Double Auctions"
Many trades in public and corporate procurement require an
agreement on multiple attributes -- besides the price, there might
be additional attributes describing product characteristics (e.g.
size, weight, material) and the nature of the contract (e.g.
delivery time, return policies, payment terms, warranty terms and
conditions). The question is, how a market mechanism can provide
support for the utilization of integrative gains and,
simultaneously, keep search costs as low as possible.
Posted offer markets do not adequately account for the integrative
potential of multi-attribute scenarios. Bilateral negotiations, on
the contrary, support the identification of Pareto optimal
solutions. However, they are relatively time-consuming and costly,
especially, if one conducts negotiations on the same goods with
several partners at a time. Multi-bilateral negotiations and
multi-attribute auctions facilitate simultaneous search for
agreements with more than one potential partner. A township, for
example, can run a reverse auction to procure new computers.
However, the manufactures have to be pointed at the negotiation
and they have to (manually) bid in many auctions run by different
townships and corporate buyers. There is a good deal of literature
on single-sided multi-attribute auctions, but up to now the
question how to coordinate several auctions on similar items is
In this paper, we outline a multi-attribute double auction
mechanism. Conventional double auctions deal with a single issue
only; usually with a price. By adding the functionality to handle
multi-attribute orders, this popular class of mechanisms used by
virtually all financial exchanges becomes applicable in a wide
variety of procurement scenarios.
Continuous-time multi-attribute double auctions are motivated,
formalized, exemplified, and discussed in the paper. The two key
factors in this auction are (1) matching, and (2)
Matching refers to testing whether an incoming offer is compatible
with any order in the order book and, if it is compatible with
several orders, to select a single one among them. This process
bases on hard constraints on what is an acceptable deal for a
trader submitting an order and what is not. Arbitration refers to
defining a specific agreement for two orders, once they are
matched. Arbitration draws on concepts from cooperative game
theory and requires, that the hard constraints on the
acceptability are accompanied by soft constraints on the
desirability of different possible trades. These soft constraints
are expressed as utility functions in the auction.
Jin-Baek Kim, "An
Efficient Competitive Bidding Process for Supply Chain Formation"
In supply chain procurement, the cost of an item is often affected by the suppliers for the
inter-dependent items due to location, existing relationships, reliability, etc.
However, previous literature on auctions-based procurement paid little attention to
the issue of cost dependency among suppliers.
In this paper, we propose a competitive
bidding process for procurement of multiple heterogeneous items that allows a bidder to
express cost dependency with other bidders. We study properties of the proposed process and
issues in implementation. We also present how it can support decentralized and transparent
formation of supply chains.
JinBaek Kim, Stefan Strecker, Gregory Kersten
and Ka Pong Law,
"Theory of Negotiation Protocols for Developing e-Negotiation Systems"
In this paper, we present a theory of negotiation protocols for developing a general
purpose e-negotiation platform running negotiations following different rules. The focus of the theory
is development of web-based e-negotiation systems. We aim to provide a basis for designing a negotiation
protocol that can be deployed on a generic e-negotiation platform. The theory provides constructs, models,
and methods for designing negotiation protocols. It is based on phase based negotiation process model
and a state machine. The negotiation protocol following the theory provides details enough to deploy
such as which page to display, what activities to allow at each page, and what to do when a user performs
an action. We illustrate how the theory can be used for building a negotiation protocol by illustrating
implementation of common patterns in negotiation protocols and two complete negotiation protocols.
Hsiangchu Lai and Her-Sen Doong,
"Synchronous vs. Asynchronous Communications in E-negotiation"
Following the rapid progress in information technology, there are more choices
in using different information technologies in electronic support negotiations. Basically,
communication support and decision support are the two main streams of adopting IT in e-Negotiation.
Regarding the communication support, it can be e-mail, online chatting, teleconferencing with video or not.
In terms of media richness theory, different communication tools will have different performance in speed
of feedback, number of ways in which the information can be communicated, the range of meaning that
can be conveyed by language symbols and the personal feelings and emotions infusing the communication.
This research is trying to compare the difference between synchronous and asynchronous communication tools in e-negotiation using experiments based on media richness theory. For synchronous communication, the subjects use online chatting room to negotiate. As for asynchronous communication, e-mail is adopted. The data is collected from questionnaires and system logs. In addition to examining the data based on the media richness theory, the negotiation process and results will be analyzed too.
Hsiangchu Lai, Gregory E. Kersten and Her-Sen Doong,
"Decision Support Tools in E-negotiations: A Comparative Analysis"
Negotiation is a sequence of interdependent decisions made by two or more people who
exchange offers and counter-offers in a process called the "negotiation dance." How to help negotiators
to arrive at better decisions during the negotiation process and achieve better agreements are critical
issues in negotiation research. The purpose of this research is to explore how decision support tools impact
the negotiation and its results. In an experiment conducted online two negotiation support systems, Inspire
and SimpleNS were used. Inspire provides users with decision support tools, such as offer rating, graphical
representation of the negotiation dynamics, and recommendation for agreement improvement, while SimpleNS
provides solely a communication platform.
The data instruments include pre-questionnaire, post-questionnaire and system logs. The key constructs of the research framework are: users, system use, approach, knowledge about counterpart, agreement, ease of use and usefulness. The construct system use is characterized by the number of exchanged messages and offers, and the time to reach agreement (if any). The construct approach describes the user and his or her counterpart's strategies in the negotiation as they were perceived by this user. On the other hand, the construct agreement, if reached, is characterized by the difference between its values and the expected and reserve values that each user specified after reading the case but prior to starting the negotiation.
Ka Pong Law,
Gregory E. Kersten, JinBaek Kim and
Stefan Strecker, "Design and Implementation of
Invite, a Multi-Protocol Negotiation Platform"
E-negotiation systems are usually based on single and fixed negotiation protocol. In this paper, we explore the design and implementation of Invite, a multi-protocol negotiation platform. Invite allows the running of multiple and different negotiation protocols simultaneously. Different protocols which can be used for teaching and research purposes may be added at any time; other protocols can be used for real-life bilateral and multilateral negotiations, negotiations between groups and also auctions.
The design of Invite is based on the negotiation process model and theory of negotiation protocols. In order to obtain a high level of flexibility and reusability required by the design assumptions, the development methodology utilizes the MVC concept and Fusebox framework. The challenges of the development process are presented and two implemented protocols are outlined. The implications for the design and implementation of additional protocols are discussed. The initial testing and its results are also presented.
Lutz Limburg, Daniel
Rolli and Christof Weinhardt, "Foundations
of an Experimental Study for Comparing Auctions and Negotiations
in Electronic Procurement"
Auctions as well as negotiations are trading mechanisms that are widely used for the transaction
of goods. Nevertheless, it is still unclear what procedure is preferable in which situation. In this
paper, we are focusing on a procurement setting, where one buyer is searching for a supplier among
a set of n potential sellers. For this setting we want to analyze the impact of various structural
mechanism parameters on the market outcome. Our mid-range goal is to give helpful advice on
what particular procedure embodiment would be expected to achieve most satisfying results.
In current literature, a general position postulates that auctions are better suited for smaller and
less important contracts, and that the flexibility of negotiation provides a more efficient support
for defining important contracts with high values at stake. However, this position is based on the
presumption that auction-based systems are capable of computing only one attribute in their bidding
space - the price. As recent developments have fostered a range of more sophisticated auction
mechanisms that are capable of dealing with multiple issues, there is a strong need for thoroughly
revisiting this position with respect to the broadened perspective. Therefore, we present a research
agenda for the multiple issue case, where we identify structural characteristics of multi-attributive
auction and negotiation mechanisms.
As a foundation of our analysis, we employ two pure institutions, namely ”multi-attributive
procurement auction (MAPA)” and ”multi-attributive multi-bilateral negotiation in procurement
(MMNP)”. MAPA represents a multi-attributive English auction, in which a scoring rule based on
the buyers’ preferences is used to order incoming bids - the communication is restricted to offers
from the seller-side. In MMNP, a bidirectional exchange of offers and messages is allowed, by
which messages enrich the communication process. In between MAPA and MMNP we span a
landscape of hybrid institutions that combine characteristics of both extremes. For the purpose of
classification we draw upon the Montreal Taxonomy and then aggregate the major criteria in two
categories. This is firstly the ”freedom of communication” and secondly the ”degree of rules” that
represent the two dimensions for characterizing our mechanisms. We argue that for comparing the
two pure institutions in experimental studies one has to move step-by-step via a path of hybrid
institutions from one pure institution to the other. That is to systematically identify the impact of
each factor on the outcome separately.
We have strictly limited the scope of our research on factors that differentiate auctions from
negotiations. Therefore, we do not regard factors like the number of sellers or the complexity of
a contract by varying the number of attributes, although they may have additional impact on the
efficiency of a given institution. The provided foundation prepares the ground for an immediate
future series of experiments.
Four basic hypotheses reflect our notion of how we expect the classification according to the two
dimensions will be mapped to the results. (1) When increasing the degree of rules, the institution
converges more rapidly to an agreement. (2) A higher degree of rules leads to a higher efficiency.
(3) Efficiency is higher with messages than without. (4) The degree of rules has more impact on the
efficiency than the existence or absence of messages.
Gregory E. Kersten and JinBaek Kim,
"Generating Packages for E-Negotiations"
Components for preference elicitation and estimation of the individual
utility (value) function are often required in e-negotiation systems. The social character
of negotiations and, associated with it, learning of their participants may lead to changes
in the negotiator’s preferences. E-negotiation participants are often not well acquainted
with the intricacies of the utility construction process and unwilling to devote significant
time and effort to the elicitation of their preferences. These two factors contribute to our assumption
that users of e-negotiation systems require a simple and easy to use software component for the utility
construction which also does not impose significant informational requirements. The utility function
constructed this way is not a precise measure of preferences but it is tentative and rough one; it
provides an indication but it is easy to verify and change whenever this is required.
One of the suitable and easy to use preference elicitation methods is
hybrid conjoint analysis. The first step of the procedure is compositional and involves the assignment of
weights to issues and options. The second step involves generation of packages (alternatives) and their
assessment. This is followed by decompositional step in which the package utilities are decomposed
into issue and option partial utilities. The number of generated packages should
be small enough such that the task does not become tedious, but large enough
to allow the system to recover individual option ratings. Also it is important
that the selected packages represent as close as it is possible the whole spectrum
of the packages, that is, every option occurs in a package as many times as every
other option as much as it is possible.
In this paper we propose an algorithm that builds
a set of packages that the user will rate. Recomputing issue and option ratings
from the packages which the user evaluates is considered as solving a linear
system of equations. There are N unknowns, corresponding to the utility
values of the N individual options. In order to be able to solve this system,
we need N equations. We show that if a negotiation problem has n issues,
the user needs to rate N-n+1 packages, and n-1 individual
options (the individual option ratings can also be done automatically by the
NSS, if it fixes to 0 options that are least desirable to a user). We then describe
an algorithm that shows how to build N-n+1 packages. We represent
each package as a vector of length N, with 0 and 1 values. A value of 1 at index i in
the vector shows that option i appears in the package, while a value
of 0 indicates that the corresponding option does not appear in the package.
The task of generating N-n+1 packages becomes the task of generating
a matrix A of size NxN, with a non-zero determinant (to allow
us to compute the individual package ratings), in which N-n+1
lines represent packages, and n-1 lines represent individual values.
We start from the identity matrix, which we know is not singular, and we generate A by
linearly combining the identity matrix's lines.
Dirk Neumann and Bjoern Schnizler, "Transforming
Auction Mechanisms into Protocols"
The theoretical basis of auction design has emerged from a sub-discipline of game theory called mechanism
design. A mechanism defines a formal concept that specifies the possible message space for each individual
and a function that maps the messages into an outcome. Considering auctions, a mechanism could define
the bidding language as the strategy space (e.g. bid higher than the ask price) and a clearing and
pricing schema as an outcome function (e.g. the bidder with the highest bid receives the resource
and pays the value of the second highest bidder for it).
Economic auction design typically ends with the derivation of an abstract formal specification of the
auction mechanism. This specification, however, does not comprise all the information to construct an
auction protocol that could be implemented as a software system in later stages. Apparently, there is a
gap between auction theory and auction implementation. This gap is an inherent source of failure, as no
coherent systematic approach exists that transforms the formal economic concept of an auction mechanism
into an implementable protocol.
This paper suggests a systematic approach to transform any auction
mechanism into a (semi-) formal protocol. At heart, the approach is divided into two phases.
In the first phase - the analysis phase - the bidding
language is transformed into a role model. Since the message space of an auction mechanism comprises all
feasible actions of any agent, it is possible to extract this information and represent it differently
in a role model. Moreover, the way of interaction is also derived from the auction mechanism. Wherever
information is missing, it must be added by either experience or by intuition. In the second phase -
the design phase - a functionality model specifying all primitive activities which the agents are
allowed to perform in detail is constructed.
Once all those models are generated, they can be represented by formal process models. In this paper,
AUML (Agent Unified Modeling Language) is used to represent the communication among autonomously acting
agents. Since auctions can be interpreted as such a distributed system, the analogy is straightforward.
The approach is demonstrated by referring to an example drawn from the resource allocation problem in
the Computational Grid. For that scenario a multi attributive combinatorial double auction has been
designed and formally specified. Formalization of the mechanism, however, remains on the economic
mechanism level. Exemplary, the presented transformation approach will be demonstrated by transforming
the mechanism into a fully-fledge auction protocol. The resulting protocol is still independent of
implementation details but concrete enough to commence an ordinary software engineering process.
Jesus Rios, Eva Chen,
David Rios Insua, JinBaek Kim and Ka Pong Law,
"Application of e-Negotiation System to e-Democracy: Participatory Budgeting with Invite System"
E-negotiation systems can assist e-democracy by enabling,
coordinating, and facilitating participation of citizens in public decision-making
processes. We consider here participatory budgeting, which is one of the
more contentious issue that often involves citizens. The question that needs
to be addressed is to provide the citizens with means and capabilities so
that they can effectively participate in public budget allocation. Although
several efforts have been made to address this question, the scope and complexity
of information processing and communication required for decision-making
by a large number of participants have turned out to be one of the main stumbling
Under the full open and truthful intermediary
disclosure (FOTID) situation, an e-negotiation system can help the participatory
budgeting process. It may provide support to citizens in expressing their
individual preferences allowing them to fully examine and assess the set of
alternatives, and facilitate interactions leading to a consensus. If a consensus
cannot be reached the system may provide a voting mechanism. In this paper,
we represent participatory budgeting process in terms of multilateral negotiation
processes. The involvement of many participants who may have different requirements
and abilities necessitates the negotiations to be conducted following different
protocols. Invite is a generic e-negotiation platform capable of running
multiple negotiation protocols and we discuss the implementation issues of the
"User adoption of Online Dispute Resolution (ODR) Services: From a Conceptual Model to Experiment Design"
The global diffusion of web services brings tremendous opportunities for
cross-national trade between consumers and firms. This type of online trade, however, may drive
disputes between the transacting parties. The special characteristics of online communications
such as anonymity of users, synchronism, limited expression power, and cross-cultural barriers
can easily generate and escalate disputes. While the potential for disputes increases, the capacity
of conventional dispute resolution mechanism, such as court litigation, to deal with such disputes declines.
Several ventures, namely Online Dispute Resolution (ODR) services,
have recently emerged to address this market need. For example, auction sites like eBay have recognized
that users cannot efficiently use the court of law to settle their difference and hence, offer alternative
dispute resolution mechanisms online (Bunnell et al. 2000 ; Gonzalez 2003 ; Katsh et al. 2001). Cognitive
acceptance processes that drive the adoption of ODR services, however, are untapped yet.
Using a multi-disciplinary approach, that involves viewpoints from
the information systems, dispute resolution, negotiation and human resources research realms,
this study defines a unified model that explains individuals' perceptions and behaviors with
regards to ODR. In particular, two paradigms are used to explain attitudes and behaviors in
this context: the utilitarian paradigm and the fairness paradigm. The merged model will then be
tested using a commercial ODR system with student subjects and a mediator, trying to resolve a
dispute online. This model is believed to accurately depict users' intentions to use ODR and
can potentially highlight ODR service features and process that may be improved to drive acceptance
of such services.
Rustam Vahidov, Eva Chen and Zhen Feng,
"Experimental Evaluation of Agent-Supported e-Negotiations"
This paper presents the results of experimental evaluation of the effectiveness of agent support in e-negotiations. The agent-enhanced e-negotiation system e-Agora has been used in the experiments. The system features an agent that assists the user in generating candidate offers, evaluating and critiquing incoming offers, and critiquing the counter-offers. The work investigates the effects of agent support and task complexity on negotiation performance and perceived measures of usefulness, satisfaction, ease of use and confidence. Overall, the results support the expectation that use of an agent leads to higher level of negotiation effectiveness, in particular for higher complexity tasks.
Shikui Wu and Gregory E. Kersten,
"Design and Implementation of InterNeg Support System in the Invite Software
The rapid development of e-commerce raises the need of systems that support
electronic negotiations. Recent work on negotiation support systems concentrates on web-based
negotiation support tools. As part of the InterNeg project, Inspire,
which is an e-negotiation system to conduct bilateral negotiations, has
been developed and deployed. The system contains a facility for specification
of preferences and assessment of offers, an internal messaging system,
and graphical displays of the negotiation's progress. Inspire has a number
of limitations which are necessary in order to conduct longitudinal experiments
but which make the system unusable in real-life situations. These limitations
include the fixed number of the negotiation issues and options, and the
inability to add more participants to the negotiation table.
Support System) is an e-negotiation system that allows to use different
negotiation strategies and tactics, and to negotiate over open and
dynamically modifiable problems. It is based on Inspire but enhanced
and expanded with some new features for more practical negotiations.
The focus of this paper is on the design and implementation of INSS and
its key features, including: (1) the establishment of a case library;
(2) the introduction of the problem specification and modification components;
(3) the introduction of a negotiation protocol which allows negotiators
to formulate their own negotiation case on-line, to specify the process
and the permissible activities of its participants; (4) the specification
of different types of issues and options which can be introduced by the
users and interpolated (or extrapolated) by the system; and (5) the application
of the e-marketplace concepts to provide a platform to conduct multi-bilateral
To implement the system, we apply Fusebox technology
prototyping and rapid application development (RAD). The INSS negotiation
protocol and all its components are implemented in Invite system with
database-driven approach. The system’s usability will be tested with a small group of participants
in different contexts defined by problem complexity and users’ characteristics.
March 16, 2005