Table Of Content<f) SpringerWienNewYork
Michael Filzmoser
Simulation of
Automated Negotiation
SpringerWienNewYork
Mag.MichaelFilzmoser,PhD
InstituteofManagementScience,ViennaUniversityofTechnology,Austria
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Preface
Automatednegotiationisarguedtoimprovenegotiationoutcomesandreducetrans-
actioncostsinelectronicbusinessandtoenablesophisticatedcooperationandco-
ordination between software agents in autonomous systems. However, due to the
youthofthefieldoperativesystemsdonotyetexistandscholarsrelyonsimulation
studies to evaluate potential system configurationsfor automated negotiation.We
reviewthestateoftheartliteratureonsimulationofautomatednegotiationalongits
main components:the negotiationproblem,the interactionprotocol,and the soft-
wareagents.Deficienciesofexistingapproachesconcerningthepracticalapplica-
tioninanopenenvironmentastheInternet,whereautomatednegotiationproceeds
fast,withdifferentopponents,andforvariousnegotiationproblems,areidentified.
Toaddressthesedeficiencieswemodelandsimulateautomatednegotiationsys-
temsconsistingofsoftwareagentsandinteractionprotocols,whichwereproposed
innegotiationandgametheoreticmechansimdesignliteraturebutnotusedinsim-
ulationsyet.Theproposedsoftwareagentsfollowgenericoffergenerationandcon-
cession strategies and are governed by interaction protocols that allow agents to
interrupt their strategy to avoid exploitation and unfavorable agreements. The in-
put for these automated negotiation systems are preferences elicited from human
in negotiationexperimentsto guaranteerealisticallycomplexanddiversenegotia-
tionproblems.Simulationoutcomesarecomparedacrossthedifferentsystemsand
to the results of the negotiationexperimentsalong variousoutcome dimensions–
proportionof(Pareto-optimal)agreements,dyadicandindividualperformance,and
fairness.
Theevaluationofthesecomparisonsindicatesthatthecentraldilemmafoundin
negotiationresearch – i.e that aspects favoringan agreementnegativelyeffect the
qualityoftheagreement–alsocanbeobservedforthedesignofautomatednegoti-
ationsystems.Theinteractionprotocolandtheconcessionstrategiesofthesoftware
agentsarefoundtohavehighinfluenceontheproportionofagreementsreached,but
donotaffectoutcomequality.Theoffergenerationstrategyofthesoftwareagents,
ontheotherhand,toalargeextentdeterminethequalityofagreements.Addition-
allythedifferentdesignoptionsavailableforthecomponentsingeneraloppositely
influencetheprospecttoreachagreementsandthequalityofreachedagreements.
viii Preface
Giventhese fundamentaltrade-offsin outcomedimensions,it is not surprising
that most system configurationsonlymanagedto outperformthe result of the ne-
gotiationexperimentsonlyforsomeoutcomemeasuresbutwereinferiorinothers.
However,asetofsystemsconsistingofsoftwareagents,thatsystematicallypropose
offersofmonotonicallydecreasingutilityandmakefirstconcessionstepsiftheop-
ponentreciprocatedpreviousconcessions,andaninteractionprotocolthatenables
torejectunfavorableoffers–withoutimmediatelyabortingnegotiations–inorder
to elicit new offers from the opponent,performedbest. These systems performed
very well compared to other configurations and were the only that outperformed
negotiationsbetweenhumansinalldimensions.
Especiallythesystematicalstateoftheartliteraturereview,thedevelopedcon-
ceptual model, and its implementation as simulation program provide theoretical
and methodologicalbackgroundfor students andscientists in the fields of negoti-
ation and simulation. Moreover, the presented simulation results are not only in-
formative to the former audience but also valuable for practitioners interested in
implementingnegotiationmechanismsinelectronicbusinessandautonomoussys-
tems.
Vienna,December2009 MichaelFilzmoser
Acknowledgements
IamespeciallyindebtedtomymentorRudolfVetscheranotonlyforhisinvaluable
advice in scientific questions but above all for his support and confidence in my
qualifications.
Moreover,Iwouldliketothankmycolleaguesatthechairfororganizationand
planningoftheUniversityofViennaandthechairforlaborscienceandorganization
attheViennaUniversityofTechnology–SabineKo¨szegi,Eva-MariaGillesberger,
MaritaHaas,JosefWindsperger,AlbertSchwingenschlo¨gl,MicheleGriessmair,and
JohannesGettinger–forinterestingdiscussionsaswellashelpfuladviceandfeed-
backwhichallcontributedtothisbook.
Furthermore,IexpressmygratitudetotheGregoryKerstenandtheInterNegRe-
search Group for providingaccess to the Inspire database on the Itex-Cypress
experiments.Of course I also thankthe numerousassociated researchers for con-
ductingtheseexperiments,whichwereinvaluablefortheempiricalpartofthisbook.
LastbutnotleastIwouldliketothankSibilleRosenbergerandEva-MariaOber-
hauserfromSpringerVienna fortheirassistanceinpublishingthisbook.
Contents
1 Introduction................................................... 1
1.1 Importanceofnegotiation.................................... 2
1.2 Developmentofnegotiationresearch .......................... 3
1.3 Contributionsofautomatednegotiation ........................ 6
1.3.1 Automatednegotiationinelectronicbusiness............. 8
1.3.2 Automatednegotiationinautonomoussystems ........... 10
1.4 Researchquestionandmethod................................ 11
1.5 Structure.................................................. 12
2 Simulation .................................................... 15
2.1 Simulationprocess ......................................... 18
2.2 System ................................................... 19
2.3 Modelingandvalidation..................................... 21
2.3.1 Datavalidity ........................................ 24
2.3.2 Conceptualvalidation ................................ 25
2.3.3 Operationalvalidation ................................ 26
2.4 Conceptualmodel .......................................... 29
2.5 Implementationandverification .............................. 32
2.6 Simulationprogram ........................................ 33
2.6.1 Timeadvanceindiscrete-timesimulation ................ 33
2.6.2 Programmingstyles .................................. 35
2.7 Experimentation ........................................... 39
2.7.1 Simulationoutput.................................... 39
2.7.2 Experimentaldesign.................................. 42
2.7.3 Sensitivityanalysis................................... 43
3 AutomatedNegotiation ......................................... 45
3.1 Currentachievementsinsimulationofautomatednegotiation...... 49
3.1.1 Negotiationproblem ................................. 52
3.1.2 Interactionprotocol .................................. 58
3.1.3 Decisionmakingalgorithmsofsoftwareagents ........... 64
xii Contents
3.2 Futurechallenges........................................... 71
3.2.1 Realisticallycomplexnegotiationproblems .............. 71
3.2.2 Alternativedecisionmakingalgorithms.................. 73
3.2.3 Flexibleinteractionprotocols .......................... 75
4 ConceptualModel.............................................. 79
4.1 Input ..................................................... 81
4.1.1 Negotiationobject–theItex-Cypresscase ............... 82
4.1.2 DataacquisitionwithInspire........................ 83
4.1.3 Preferences ......................................... 85
4.2 Automatednegotiationsystem................................ 89
4.2.1 Interactionprotocol .................................. 90
4.2.2 Softwareagents ..................................... 96
4.3 Modelingandvalidation.....................................108
4.4 Implementationandverification ..............................111
5 Experimentation ...............................................115
5.1 Experimentaldesign ........................................115
5.1.1 Replication .........................................117
5.1.2 Variancereduction ...................................118
5.1.3 Executionofsimulations..............................119
5.2 Measurement..............................................120
5.2.1 Independentvariables ................................121
5.2.2 Dependentvariables..................................125
5.3 Analysis ..................................................128
6 Results........................................................133
6.1 Automatednegotiationvs.humannegotiation...................136
6.2 Comparisonofinteractionprotocols...........................139
6.3 Comparisonofsoftwareagents ...............................142
6.4 Agentfeaturesandagent-protocolinteraction ...................149
6.5 Sensitivityanalysis .........................................156
6.6 Discussion ................................................159
6.6.1 Comparisontothebenchmark .........................160
6.6.2 Designtrade-offsfordifferentoutcomedimensions........161
6.6.3 Role‘dependence’ ...................................164
7 Conclusion ....................................................173
Appendix A: DataandSourceCode .................................179
A.1 Inputandoutputdata .......................................179
A.2 Sourcecode ...............................................181
A.2.1 Sourcingandparametrization..........................182
A.2.2 Databaseconnection .................................183
A.2.3 Preferencedetermination..............................183
A.2.4 Generalinteractionmechanism.........................184
Contents xiii
A.2.5 Mainloop ..........................................186
A.2.6 Softwareagents .....................................188
AppendixB: Replications ..........................................199
B.1 Replicationsforprotocol 1...............................200
B.2 Replicationsforprotocol 2...............................201
B.3 Replicationsforprotocol 3...............................203
AppendixC: SummaryTables ......................................207
Glossary ..........................................................233
References.........................................................235
Index .............................................................245
