Skip to main content
SpringerLink
Log in

On Negotiations and Deal Making in Electronic Markets

  • Published:
Information Systems Frontiers Aims and scope Submit manuscript

Abstract

Negotiation has traditionally been an important element in all types of commerce. As electronic commerce systems become generally available on the Internet, there is a need to support negotiation in the context of deal making. However, as in the physical world, the type of negotiation mechanism required is context dependent. In particular, we distinguish between the support required in the context of single deal and support required in coordinating negotiations across multiple deals. A framework is presented to describe deal making and negotiation in the context of a single deal. It is used to illustrate four representative Internet-based automated trading scenarios and to help understand the success of the scenario featuring online auctions. While popular, online auctions are limited in that they permit negotiation only along a single dimension such as price. We present ongoing work on multi-attribute negotiation mechanisms, and outline important new concepts relevant to supporting coordination across multiple deals.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Alty JL, Griffiths D, Jennings NR, Mamdani EH, Struthers A, Wiegand ME. ADEPT–Advanced Decision Environment for Process Tasks: Overview and Architecture. Proceedings of the BCS Expert Systems 94 Conference (Applications Track). Cambridge, UK 1994;359–371.

  • Asokan N, Janson P, Steiner M, Waidner M. State of the art in electronic payment systems. IEEE Computer 1997;30(9):28–35.

    Google Scholar 

  • Beam C, Segev A. Electronic Catalogs and Negotiations. CITM-96–WP-1016, available at http://haas.berkeley.edu/~citm/wp-1016–summary.html. Fisher Center for Information Technology and Management, U.C. Berkeley, Berkeley, CA 1996.

    Google Scholar 

  • Beam C, Segev A. Auctions on the Internet: a Field Study. CITM Working Paper 98–WP-1032. Haas School of Business, University of California at Berkeley, Berkeley, CA 1998.

    Google Scholar 

  • Bichler M, Beam C, Segev A. OFFER: A Broker-centered Object Framework for Electronic Requisitioning. IFIP Conference: Trends in Electronic Commerce'98. Hamburg, Germany 1998.

  • Bichler M, Kumar M, Jhingran A. Multi-attribute Competitive Bidding. Working Paper. IBM Thomas JWatson Research Center, Yorktown Heights, NY 1998b.

    Google Scholar 

  • Bichler M, Segev A. A Brokerage Framework for Electronic Commerce. Forthcoming in Journal of Distributed and Parallel Databases, Special Issue on Electronic Commerce 1998.

  • Binmore K, Partha D, eds.. The Economics of Bargaining. Blackwell 1987.

  • Chatterjee K, Samuelson W. Bargaining Under Incomplete Information: The Unrestricted Offers Case. Operations Research 1983:36(4):605–618.

    Google Scholar 

  • Chavez A, Kasbah MP. An Agent Marketplace for Buying and Selling Goods. MIT Media Lab, http://agents.www.media.mit. edu:80/groups/agents/Publications/kasbahpaam96.ps 1996.

  • Clemen RT. Making Hard Decisions: an Introduction to Decision Analysis. Boston, MA: Duxbury Press, 1996.

    Google Scholar 

  • Cortese AE, Stepanek M. Goodbye to Fixed Pricing. Business Week 1998;4.

  • Faratin P, Sierra PC, Jennings NR. Negotiation Decision Functions for Autonomous Agents, Int. Journal of Robotics and Autonomous Systems to appear 1998.

  • Fisher R, Ury W. Getting to Yes: Negotiating Agreement Without Giving In. Boston, MA. Houghton Mifflin, 1981.

    Google Scholar 

  • Foroughi A. A Survey of the User of Computer Support for Negotiation. Journal of Applied Business Research 1995;121–134.

  • Friedman D. A Simple Testable Model of Double Auction Markets. Journal of Economic Behavior & Organization 1991;15(1):47–70.

    Google Scholar 

  • Friedman D, Rust J. The Double Auction Market: Institutions, Theories, and Evidence. Reading, Mass: Addison-Wesley Pub. Co.,1993.

    Google Scholar 

  • Gallant M. An Electronic Partner at the Negotiating Table. Canadian Business Review 1991;18(3):42.

    Google Scholar 

  • Gresik T, Satterthwaite M. The Rate at Which a Simple Market Converges to Efficiency as the Number of Traders Increases: an Asymptotic Result for Optimal Trading Mechanisms. Journal of Economic Theory 1989;48(1):304–333.

    Google Scholar 

  • Guttman R, Maes P. Cooperative Versus Competitive Multi-item Negotiations in Retail Electronic Commerce. Proceedings of the Second International Workshop on Cooperative Information Agents (CIA '98). Paris, France 1998.

  • Hu C. The Basics of Conjoint Analysis. http://www.nevada.edu/ ~ huc/html/doca.html, University of Nevada 1998.

  • Jelassi MT, Foroughi A. Negotiation Support Systems: An Overview of Design Issues and Existing Software. Decision Support Systems 1989;5(2):167–181.

    Google Scholar 

  • Keeney R, Raiffa H. Decisions with Multiple Objectives: Preferences and Value Tradeoffs. John Wiley & Sons, 1976.

  • Kersten G, Noronha S. Negotiation via the World Wide Web: a Cross-Cultural Study of Decision Making. http://interneg.carleton. ca/interneg/research/misc/inc91.html. University of Carleton, Carleton, Canada 1998.

    Google Scholar 

  • Kersten GE, Noronha SJ. Negotiation and the Internet: Users' Expectations and Acceptance. At http://WWW.business Carleton.ca/interneg/researofch/interneg/inspire_users. Carlton University, School of Business, Canada 1996.

    Google Scholar 

  • Klein S. Introduction to Electronic Auctions. International Journal of Electronic Markets 1997;7(4).

  • Krishnan R, Carley K, Khosla P, Miller J, Paredis C. CyberANT: Design and Evaluation of Autonomous Negotiating Teams. Working Paper, Institute for Complex Engineered Systems, Carnegie Mellon University 1998.

  • Kumar M, Feldman S. Business Negotiations on the Internet. Yorktown Heights, NY: IBM Institute for Advanced Commerce, Addison-Wesley Pub. Co.,998.

  • Lindemann M, Runge A. Permanent IT-support in Electronic Commerce Transactions. in Electronic Markets Newsletter. 1997;(7:1):18–20.

    Google Scholar 

  • Lucking-Reiley DH. Magic on the Internet: Evidence from Field Experiments on Reserve Prices in Auctions. Working paper, Vanderbilt University, Nashville, TN 1997.

    Google Scholar 

  • McAfee RP, McMillan J. Auctions and Bidding. Journal of Economic Literature 1987;25(2):699–738.

    Google Scholar 

  • Milgrom P. Auctions and Bidding–a Primer. Journal of Economic Perspectives 1989;3(3):3–22.

    Google Scholar 

  • Myerson RB, Satterthwaite MA. Efficient Mechanisms for Bilateral Trade. Journal of Economic Theory 1983;29:265–81.

    Google Scholar 

  • Nash Jr JF. The Bargaining Problem. Econometrica 1950;155–162.

  • Nash, John. Two-Person Cooperative Games. Econometrica 1953;21:128–40.

    Google Scholar 

  • Noriega P. Agent Mediated Auctions: The Fishmarket Metaphor. Ph. D. Dissertation, Universitat Autonoma de Barcelona, Barcelona, Spain 1997.

  • NSFWorkshop: Research Priorities in Electronic Commerce, Center for Research in Electronic Commerce 1998.

  • Oliver JR. A Machine Learning Approach to Automated Negotiation and Prospects for Electronic Commerce. University of Pennsylvania, http://opim.wharton.upenn.edu/~ oliver27/ papers/jmis.ps 1996.

  • OMG Electronic Commerce Domain Task Force Homepage (1999), in: http://www.osm.net/ecdtf.html.

  • Osborne, Martin J, Ariel Rubinstein. Bargaining and Markets. San Diego: Academic Press, 1990.

    Google Scholar 

  • OTP Specification Version 0.9.9 (letter format) as submitted to the IETF (707k) (1999), in: http://www.otp.org/.

  • Perkins WC, Hershauer JC, Foroughi A, Delaney M. Can a Negotiation Support System Help a Purchasing Manager? International Journal of Purchasing and Materials Management 1996;37–45.

  • Raiffa H. The Art and Science of Negotiation. Cambridge, MA: Harvard University Press, 1982.

    Google Scholar 

  • Reck M. Trading-Process Characteristics of Electronic Auctions. International Journal of Electronic Markets 1997;7(4).

  • Resnick P, Cranor L. Multi-round Negotiations using Software Agents TPRC 1997.

  • Rosenschein JS, Zlotkin G. Rules of Encounter: Designing Conventions for Automated Negotiation Among Computers. Cambridge, MA: MIT Press, 1994.

    Google Scholar 

  • Rubinstein A. Perfect Equilibrium in a Bargaining Model. Econometrica 1982;50(1):97–109.

    Google Scholar 

  • Saaty TL. The Analytic Hierarchy Process. New York City, NY: McGraw Hill (reprinted by RWS Publications, Pittsburgh, PA 1996), 1980.

    Google Scholar 

  • Sandholm T. An Implementation of the Contract Net Protocol Based on Marginal Cost Calculations. University of Massachusetts, http://ftp.cs.umass.edu/pub/lesser/sandholm-aaai93–traconet.ps 1993.

  • Schmid B. Requirements for Electronic Markets Architecture. In: International Journal of Electronic Markets. 1997;1.

  • Segev A, Wan D, Beam C. Designing Electronic Catalogs for Business Value: Results the CommerceNet Pilot. CMIT Working Paper 95–WP-1005, October.

  • Segev A, Beam C. Automated Negotiations: a Survey of the State of the Art. Wirtschaftsinformatik 1997;39(3):269–279.

    Google Scholar 

  • Segev A, Beam C, Gebauer J. Procurement in the Internet Age– Current Practices and Emerging Trends (Results From a Field Study).Working Paper 98–WP-1033, Fisher. Center, University of California, Berkeley 1998.

    Google Scholar 

  • Shubik M. First Paragraphs: Game Theory, Complexity, and Simplicity. Part I: a Tutorial. Working Paper. At http:// www.santafe.edu/sfi/publications/98wplist.html., Santa Fe Institute, Santa Fe, New Mexico 1997.

    Google Scholar 

  • Smith H, Poulter K. The Role of Shared Ontology in XML-Based Trading Architectures. in: http://www.ontology.org/main/papers/ cacm-agents99.htm 1999.

  • Tsvetovatyy M, Gini M, Mobasher B, Wieckowski Z. MAGMA: An Agent-Based Virtual Market for Electronic Commerce. Applied Artificial Intelligence, special issue on Intelligent Agents.

  • Varian H. Economic Mechanism Design for Computerized Agents. USENIX Workshop on Electronic Commerce. New York, NY.

  • Vickrey W. Counterspeculation, Auctions, and Competitive Sealedxs Tenders. Journal of Finance 1961;8–37.

  • Wellman M, Walsh WE, Wurman P, MacKie-Mason J. Auction Protocols for Decentralized Scheduling. Eighteenth International On Negotiations and Deal Making in Electronic Markets 257 Conference on Distributed Computing Systems. Amsterdam.

  • Wellman MP, Wurman PR. Markct-Aware Agents for a Multiagent World. Multi-Agent Rationality: Proceedings of the Eighth European Workshop on Modelling Autonomous Agents in a Multi-Agent World (MAAMAW-97).

  • Wilson R. Chapter 8: Strategic Analysis of Auctions. Handbook of game theory with economic applications. R. J. Aumann and S. Hart, eds., New York, NY: North-Holland, 1992.

    Google Scholar 

  • Wurman P, Walsh W, Wellman M. Flexible Double Auctions for Electronic Commerce: Theory and Implementation. Decision Support Systems.

  • Zeng D, Sycara K. Bayesian Learning in Negotiation. Working notes of the AAAI 1996 Stanford Spring Symposium Series on Adaptation, Co-evolution, and Learning in Multiagent Systems.

Download references

Author information

Authors and Affiliations

  1. Haas School of Business, University of California, Berkeley

    Carrie Beam & Arie Segev

  2. Vienna University of Economics and Business Administration, Austria

    Martin Bichler

  3. The Heinz School of Public Policy and Management, Carnegie Mellon University, Pennsylvania

    Ramayya Krishnan

Authors
  1. Carrie Beam
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Arie Segev
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Martin Bichler
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Ramayya Krishnan
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

About this article

Cite this article

Beam, C., Segev, A., Bichler, M. et al. On Negotiations and Deal Making in Electronic Markets. Information Systems Frontiers 1, 241–258 (1999). https://doi.org/10.1023/A:1010050311741

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1023/A:1010050311741

Search

Navigation