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Automated Negotiation in E-Commerce

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lightbulbAbout this topic
Automated negotiation in e-commerce refers to the use of algorithms and artificial intelligence to facilitate and execute negotiation processes between buyers and sellers in online marketplaces, aiming to optimize outcomes such as price, terms, and conditions without human intervention.
lightbulbAbout this topic
Automated negotiation in e-commerce refers to the use of algorithms and artificial intelligence to facilitate and execute negotiation processes between buyers and sellers in online marketplaces, aiming to optimize outcomes such as price, terms, and conditions without human intervention.

Key research themes

1. How can negotiation protocols and frameworks be designed to structure and govern automated e-commerce negotiations effectively?

This research area focuses on formalizing negotiation processes in e-commerce by developing and analyzing negotiation protocols and frameworks that define negotiation states, permissible actions, and communication rules. Proper protocol design is crucial to ensure flexible yet structured negotiation, coordination of multi-agent interactions, compatibility with human negotiators, and adaptability to diverse negotiation types (e.g., auctions, bilateral, multilateral). Such protocols underpin the automation of negotiation, supporting both agents' internal reasoning and inter-agent communication for efficient and reliable e-commerce transaction settlements.

Key finding: This paper models various business negotiation mechanisms, including fixed price sales, auctions, and brokerages, within a unified finite state machine (FSM) framework, revealing structural commonalities in e-commerce... Read more
Key finding: The paper elucidates the theoretical foundations for designing negotiation protocols that balance flexibility for human users and automated system enforcement. It proposes a negotiation protocol formalism that tightly couples... Read more
Key finding: This work addresses limitations of existing online auction mechanisms where bidders learn payments only upon departure, defining prompt mechanisms that disclose payments immediately upon winning. It designs deterministic and... Read more
Key finding: The proposed Negotiation Situation Specification Scheme (N3S) framework structures both internal cognitive negotiation processes and external communication via argumentation. By identifying basic argument types and relating... Read more
Key finding: This paper extends classical alternating-offers bargaining models by allowing negotiation without full preference disclosure, strategic delay signaling, proposal revisions, and belief-changing arguments. Introducing eight... Read more

2. What negotiation strategies and agent decision-making models optimize outcomes in automated e-commerce negotiations under uncertainty and multiple issues?

This thematic area explores agent-based negotiation strategies that guide proposal generation, concession tactics, opponent modeling, and multi-issue tradeoff handling to optimize negotiation utility. Emphasis is on dynamic, adaptive strategies informed by utilities, temporal constraints, behavioral learning, and multi-attribute preferences. Effective negotiation strategies enable agents to achieve higher agreement quality and faster convergence in complex e-commerce settings involving multiple parties and issues, critical for practical deployment.

Key finding: The study presents a taxonomy of negotiation strategies incorporating concession tactics and alternative search tactics tailored for mobile agent negotiation in e-trade. It emphasizes adaptive strategy selection based on... Read more
Key finding: This paper introduces a two-level negotiation process where the upper level sets high-level goals and decides engagement, while the lower level refines commitments considering feasibility and constraints. This hierarchical... Read more
Key finding: The approach integrates motivational qualities (MQ) framework for multi-goal evaluation, partial-order scheduling for concurrent multi-linked negotiation issues, and multi-level negotiation abstraction. Agents reason about... Read more
Key finding: The paper proposes a heuristic model for agents participating in multiple concurrent bilateral negotiations under incomplete information and deadlines. It coordinates negotiation threads mutually influencing bidding stances... Read more
Key finding: Besides protocol modeling, the paper also elaborates on the finite-state machine representation of negotiation messages and states that underpin negotiation strategies for various auction types and brokered sales, helping... Read more

3. How do automated negotiation systems compare with human negotiation, and what decision support or computational methods enhance negotiation outcomes in e-commerce?

This theme covers empirical and simulation-based comparative studies of automated negotiation systems versus human negotiators, investigating transaction cost reductions, outcome quality, and efficiency benefits of automation. It also encompasses decision support mechanisms, utility-based evaluation, and post-negotiation optimization procedures that compensate for human biases and power asymmetries. Understanding these dynamics aids in designing automated negotiation frameworks that can outperform or augment human negotiation in e-commerce.

Key finding: By modeling and simulating automated negotiation systems with concession strategies and comparing to outcomes from over 2000 human negotiation experiments, the study reveals that automated systems reduce transaction costs... Read more
Key finding: The study demonstrates that mathematical post-negotiation procedures, specifically the Adjusted Winner (AW) algorithm, can significantly improve negotiation efficiency and fairness, even in power-asymmetric situations common... Read more
Key finding: This research develops a Bayesian network-based technique to elicit and model users' valuations of private information disclosure consequences. By reducing uncertainty through utility elicitation and defining optimal stopping... Read more
Key finding: The PrivacyPact protocol models multi-issue negotiation exchanges of private information for rewards, ensuring completeness and convergence when mutual agreements exist. Utility theory guides participants in making offers and... Read more
Key finding: The paper introduces a law-governed interaction mechanism that separates policy definition ('law') from enforcement via trusted controllers. This formalism enables unified, secure enforcement of diverse e-commerce policies... Read more

All papers in Automated Negotiation in E-Commerce

In a laboratory experiment, we create relationships between pairs of anonymous subjects through a Prisoners' dilemma game. Thereafter the same subjects play a private values (sealed-bid double auction) bargaining game with or without... more
This paper describes a negotiation application where one of the parties has products and services as described by a catalog. In such an environment, the final deal must be based on actual entries in the catalog. However, negotiation can... more
This paper examines the ability to predict bargaining outcomes consistent with Nash, Kalai-Smorodinsky, and Gupta-Livne bargaining models as well as two heuristic solutions based on interpersonal (cardinal) comparisons of utility. Equal... more
In this paper, we have introduced an agent based e-commerce system which recommends products to buyers as per their preferences. Initially, the agent collects the buyers' preferences in fuzzy or linguistically defined terms and based on... more
Extensive literature specialises in observing the effect of information disclosure on economic behaviour originating in seller-buyer dyadic relationships. The prevalent idea is taken by Akerlof's (1970) well-known Lemons’ Market Theory... more
The development of IT and explosively growing number of Internet users are rapidly spreading and developing e-commerce, while creating diverse on-line transaction methods such as a negotiation, a reverse auction, and a bid. Among these... more
The concept of negotiation has been a vital tool in all business affairs dating back centuries. The concept has evolved over time and incorporated many features such as variable pay. The focus of the research is to look at how variable... more
Auctions have been as a competitive method of buying and selling valuable or rare items for a long time. Single-sided auctions in which participants negotiate on a single attribute (e.g. price) are very popular. Double auctions and... more
Negotiation is commonly required to reach a final contractual agreement in construction material procurement. However, even simple negotiations often result in suboptimal agreements, thus 'leaving money on the table.' An automated system... more
An electronic market platform usually requires buyers and sellers to exchange offers-to-buy and offers-to-sell. The goal of this exchange is to reach an agreement on the suitability of closing transactions between buyers and sellers. In... more
Research on automated negotiators has flourished in recent years. Yet, most of the time, the research does not focus on automated negotiators capable of negotiating efficiently with people. Many challenges are facing agents designers who... more
El hombre por su naturaleza gregaria, debe estar en permanente contacto con sus semejantes, dando y recibiendo, esto es negociando, a todo lo largo de su vida. Basándose en las habilidades adquiridas por su experiencia el hombre negocia... more
Automated negotiation on qualitative issues taking linguistic values poses the challenge of computation of their offer values while generating proposals/counter-proposals. In order to make the offer values computable for the qualitative... more
The MONOLOGUE system (Multi-Object Negotiator for On-Line Offers Guided by Utility Elicitation) for privacy negotiation is described. It integrates a number of innovative components. Negotiations are alternating offers, where each offer... more
We consider private information a commodity, of value to both the information holder and the information seeker. Hence, a customer can be enticed to trade his/her private information with a business in exchange for compensation. In this... more
This paper focuses on the study of bilateral bargaining protocol for competitive agents within the context of automated negotiation. Some modifications are proposed to improve the classical alternating-offers bargaining model and... more
Automated negotiation plays an important role in the process of reaching a mutually acceptable agreement between service consumer and service provider about the terms of the service is being provided. In the last years, a vast amount of... more
This paper describes what automated negotiation is, gives an overview of its development, explores the benefits it can bring to B2B transactions and examines the challenges and limitations involved in replacing human negotiators by... more
We examine the problem of determining a user's value for his/her private information. Web businesses often offer rewards, such as discounts, free downloads and website personalization in exchange for information about the user, such as... more
We consider private information a commodity, of value to both the information holder and the information seeker. Hence, a customer can be enticed to trade his/her private information with a business in exchange for compensation. In this... more
We present a system for multi-agent contract negotiation, implemented as a generalized market architecture called MAGNET. MAGNET provides support for a variety of types of transactions, from simple buying and selling of goods and services... more
ABSTRACT Multi-issue negotiation is popular in the e-commerce and e-negotiation fields due to its advantages over the single issue negotiation. Although negotiation over price is sufficient if there are no other properties to consider,... more
Abstract I outline a theory of choice in situations in which the decisionmaker is uncertain about his preferences. One prediction of this theory is that his willingness to pay for a good is always lower than his valuation. The outcome of... more
Abstract The main question addressed in this paper is whether a theoretical outcome determined by an auction mechanism can be reasonably approximated by negotiation among agents in order to drop some of the unrealistic constraints or... more
Abstract We present a system for multi-agent contract negotiation, implemented as a generalized market architecture called MAGNET. MAGNET provides support for a variety of types of transactions, from simple buying and selling of goods and... more
Negotiation is commonly required to reach a final contractual agreement in construction material procurement. However, even simple negotiations often result in suboptimal agreements, thus 'leaving money on the table.' An automated system... more
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