Strategies for Agent-Based Negotiation in E-Trade

E-negotiation handles negotiation over the Internet without human supervision and has shown effectiveness in concluding verifiable and more favorable agreements in a reasonably short time. In this chapter, the authors discuss the negotiation system and its components with particular emphasis on negotiation strategies. A negotiation strategy defines strategic tactics, which advise on the proper action to select from a set of possible actions that optimizes negotiation outcomes. A strategy should integrate negotiation goals and reactive attitudes. Usually, a fixed strategy is implemented during the course of negotiation regardless of significant decision-making factors including market status, opponent’s profile, or eagerness for a negotiated goods/service. The chapter presents the main negotiation strategies and outlines the different decision-making factors that should be considered. A strategy uses a utility function to evaluate the offer of an opponent and advises on the generation of a counter offer or the best interaction. The authors finally discuss different utility functions presented in the literature.