Design and implementation of a negotiation model based on the Principle of Leverage

Price bargaining is a negotiation process whereby buyer and seller have to competitively or cooperatively decide the final price of a good. The interval of agreement where the negotiated final price lies is limited by the reservation prices of both buyer and seller respectively. Naturally, when submitting their reservation prices, the wish of the buyer or seller is to have the final negotiated price equals its reservation price. Unlike previous works that present price bargaining models whose negotiated price is in the interval of agreement, not the reservation prices themselves, the proposed approach allows the winner agent to maximize its utility in case the looser agent accepts winner´s reservation price as the final negotiated price. Agreement and disagreement characteristics as possible outcome of the negotiation process are well defined. Each agent combines the Principle of Leverage and Time Dependent Tactics to achieve its goal. Hence, we verify and refine our previous negotiation model that had been presented in [4] by redesigning and implementing the conversation between bidder and auctioneer agents. The conversation is refined through the development of a negotiation process presented as a strategic game governed by rules that are based on the principle of leverage.