AutONA: a system for automated multiple 1-1 negotiation

For any organization, saving on procurement costs has an impact on profitability that is multiplied by gross margin. Although much research focus has been placed on achieving the lowest possible cost for the goods/services purchased we concern ourselves here with the operational procurement costs of the organization. The AutONA (automated one-to-one negotiation agent) system was conceived as a means of reducing these operational procurement costs enabling procurement departments to automate as much price negotiation as possible thus creating the option of reducing direct costs and/or redeployment of operational effort into strategic procurement requiring high human involvement. The problem domain has been limited to the automation of multiple 1:1 negotiations over price for quantities of a substitutable good subject to the organizations procurement constraints of target quantity, price ceiling and deadline. We present the design of the core reasoning system and preliminary results obtained from a number of experiments conducted in HP´s Experimental Economics Lab. Our main conclusion is that AutONA could reasonably be deployed for automated negotiation having shown no evidence for being identified as an automated system by suppliers.