An Adaptive Negotiation Strategy for Electronic Transactions

Negotiation is a process between self-interested buyers and sellers in a business transaction trying to reach an agreement on one or more issues. The outcome of the negotiation depends on several parameters such as the agents´ strategies and the knowledge one agent has about the others. It is important that an agent chooses a proper negotiation strategy based on the available information in order to achieve its goal. In this paper, we first perform a comparative evaluation of commonly used negotiation strategies for bilateral single-issue negotiation and show that there is no one strategy which works well in all situations. We then present an adaptive negotiation strategy that a seller can use to increase its gain. The strategy adapts itself based on information obtained about the buyer´s strategy from an ongoing negotiation process and past negotiation experiences. We present extensive simulation results to show that for a wide variety of cases, the adaptive strategy gives better performance compared to the best non-adaptive strategy found from the comparative evaluation done earlier