Equilibria, prudent Compromises,and the "Waiting" game

While evaluation of many e-negotiation agents are carried out through empirical studies, this work supplements and complements existing literature by analyzing the problem of designing market-driven agents (MDAs) in terms of equilibrium points and stable strategies. MDAs are negotiation agents designed to make prudent compromises taking into account factors such as time preference, outside option, and rivalry. This work shows that 1) in a given market situation, an MDA negotiates optimally because it makes minimally sufficient concession, and 2) by modeling negotiation of MDAs as a game /spl Gamma/ of incomplete information, it is shown that the strategies adopted by MDAs are stable. In a bilateral negotiation, it is proven that the strategy pair of two MDAs forms a sequential equilibrium for /spl Gamma/. In a multilateral negotiation, it is shown that the strategy profile of MDAs forms a market equilibrium for /spl Gamma/.