chapter 2 review of literature -...

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CHAPTER 2

REVIEW OF LITERATURE

A literature review is a description of the literature relevant to a particular field or

topic. It gives an overview of what has been said, who the key writers are, what are

the prevailing theories and hypotheses, what questions are being asked, and what

methods and methodologies are appropriate and useful. As such, it is not in itself

primary research, but rather it reports on other findings. Four main streams of

research support in the present study have been discussed within this document:

(1) Negotiation,

(2) e-Negotiation,

(3) Negotiation Support Systems, and

(4) Software Agents.

This literature review is thus composed of four sections that provide a general

summary of these respective research areas. Within each section, a brief history of the

research topic is provided, fundamental concepts relating to the topic are discussed,

and then aspects of the topic that relate specifically to the objective of the present

study.

2.1 NEGOTIATION

According to the Oxford dictionary negotiation is a formal discussion between people

who are trying to reach an agreement.[24] A contract is prepared in negotiation. Need

theory is applicable to all approaches of negotiation and also each and every level of

approach. Nierenberg & Zeif[1] in their ‘The Complete Negotiator’, say that when

negotiator deeply analyze the techniques of negotiation and found that under each

need are seen to repeat certain forms called the varieties of application of the need.

Chapter 2: Review of Literature Page 16

They have divided these needs in to six groups. The following varieties of

applications are placed in an order corresponding to the amount of positive control

that we may ordinarily have over each negotiating applications in a particular life

situation. A negotiator is working for the opponent and has more control over his

working.

1. Negotiator work towards the direction of opponent’s needs.

2. Negotiator work towards his own needs.

3. Negotiator works towards the opponent’s need as well as his own needs.

4. Negotiator works against his needs

5. Negotiator works against the opponent’s needs

6. Negotiator works against the opponent’s & his own needs

Some valuable tips for negotiators to getting ‘yes’ from the opponent are given by

Roger Fisher, William L. Ury & Bruce Patton[25] in their book ‘Getting to Yes:

Negotiation agreement without giving in’. These tips are summarized in the following

Table 2.1.

Table 2.1 : Valuable Tips for Negotiation

1. Don’t bargain over position.

2. Separate the people from the problem.

3. Focus on interests, not position.

4. Invent options for mutual gain.

5. Insists on using objective criteria.

6. What if they are more powerful

7. What if they want to play

8. What if they use dirty tricks


According to G.T. Savage, J.D. Blair, and R.L. Sorenson[26] the negotiator should

consider both relationship and facts when negotiating strategically. According to them

negotiation is a basic, generic human activity. They say that negotiation can work as a

dispute management process to keep peace and to end a strike in business during the

business deals like merger and sales of business. They advise the negotiator to

dramatize the need for bargaining and its capabilities as a dispute management

process. Conflicts in business can be easily resolved by using negotiations.

Negotiation, in its broadest implication is seen as an alternative to conflict & friction

at interpersonal, Organizational & International levels. Bob Randall[27] in buyer’s

survival guide suggests how to negotiate by being able to calculate the dealers actual

cost factors, and how to control the sales process. Negotiators who find themselves in

bargaining situations need certain behaviour and skills to be effective in that situation.

The most important skills required in such situation are perception and planning

skills, knowledge of subject matter being negotiated, ability to think clearly and

rapidly under pressure and uncertainty, ability to express thoughts verbally, listening

skills, judgment and general intelligence, integrity, ability to persuade others, and

patience.[28] Some of the circumstances are listed below where negotiation is an

appropriate choice for concluding a sale.

1. When many factors bear not only on price, but also on quality and service.

2. When business risk cannot be accurately predetermined.

3. When a long period of time is required to produce the items purchased.

4. When production is interrupted frequently because of numerous change order.

Outcome of a negotiation is affected by the professional way in which the discussions

have been conducted and reflects on negotiator and the negotiator’s company. Roy J.

Lewicki and Joseph August Litterer[29] conclude in their book ‘Negotiation’ that a

negotiator requires a good foundation for any further dealing that he may need to have

with the other person. An experienced administrator and one, who has observed

negotiations and dispute resolution in a large variety of contexts, begin their task by

thinking about the purpose of the negotiation.

A successful negotiator understands what the facts are, what the power structure is,

what the motives of various parties are. The successful negotiator has to be able to

understand his interests. He must have basic understanding of the rules that are


applicable to that particular dispute. Robert Coulson[30] illustrated the criteria for

reviving negotiation through the following flow chart:

Figure 2.1: Criteria for Reviving Negotiation

Roger Fisher and Danny Ertel[31] in their book Getting Ready to Negotiate agreeing

on a deal is only part of the commercial relationship. Keeping the deal via

implementing it is also important for the success. They further advised not to just

complain but to negotiate remedies. Negotiations are of supreme importance in

ensuring effective teamwork, negotiation must be carried out in a systematic process.

The negotiation process involves the following four steps;

1. Prepare - negotiation can't begin until each party knows what they want

2. Debate - discovering the other side's 'wants' takes up to 80% of the

negotiation

3. Propose - each side signals what 'wants' they could trade

4. Bargain - the parties state the specific 'wants' each will trade.

Gavin Kennedy[32] states that such an approach takes very short time view of the

relationship between the negotiating parties, and means that the next time negotiator

have to deal with the other party the discussion will be coloured on both sides by a

desire to settle scores from last time. If negotiator “Lost” last time, he will be

motivated to try even harder next time to outdo the people you are dealing with.

Current emphasis in negotiation is on building relationships and this means cost

cannot be the sole criterion for a deal. According to Lewicki, Saunders and Minton[33],

in any negotiation the need to build relationships must also be considered that

continue for a long time with both parties feeling satisfied where problems can be

sorted out amicably and where future negotiations can be conducted in an atmosphere


of mutual interest and support. Who, what, when and where of the negotiating process

are described in Table 2.2:

Table 2.2 : Negotiation Process

Demand Offer Threat

Who? Who is to make

decision?

Who benefit, if the

decision is made?

Who get hurt, if the

decision is not made?

What? Exactly, what

decision is desired?

If the decision is made,

what benefit / costs can

be expected?

If the decision is not

made, what risk /

potential benefits can

be expected?

When? By what time does

the decision have to

be made?

When if ever will the

benefit of making the

decision occur?

How soon will the

consequences of not

making the decision be

felt?

Why? What makes this a

right, proper and

lawful decision?

What makes these

consequences fair and

legitimate?

What makes these

consequences fair and

legitimate?

The relation between culture and negotiation styles has been the topic of much

investigation and research in recent times. The term "culture" is understood

differently by different authors. These different notions of culture yield different

understandings of the culture-negotiation link. ‘Rethinking the culture-negotiation

link in negotiation theory and practice’ of Negotiation Journal, R.J. Janosik[34] finds

four distinct approaches to understanding the impact of culture on negotiation. The

first approach views culture as learned behaviour. It focuses on actions, without

giving much attention to the reasons behind those actions. Researchers following this

approach observe that certain types of behaviour are common to certain cultures, and

attempt to catalogue those behaviours. Some of the earliest investigations into cultural

differences take this form. The approach tends to yield cross-cultural negotiation

etiquette guides, or how-to manuals. Such general yet definite advice is often helpful

to practitioners.


However, Janosik[34] notes that this approach has difficulty accounting for individual

variations in negotiation styles. The second approach views culture as a matter of

shared basic values. For this approach "the assumption, simply put, is that thinking

precedes doing, and that one's thinking patterns derive from one's cultural context

behaviours. A third approach understands cultures as shaped by the dialectic tension

between paired, opposing values. American culture, for instance, can be seen as

shaped by the tension between the values of collectivism and individualism, or

pragmatism and idealism, or spirituality and materialism. This approach has the

advantage of being dynamic where the previous approaches were static.

The fourth approach draws on a systems theory and offers multi-causal explanations

of negotiating behaviour. Basic values are seen as only one cause among many.

Human behaviour is shaped by a complex set of factors including individual

personality, cultural values, and the social context. Negotiating behaviour will vary

depending upon a wide range of factors, such as the participant's age, religion, class,

or character, relations of authority, institutional setting, the opponent's behaviour, and

even the presence or absence of an audience. Academic analysts currently favour this

approach. According to her, its complexity gives more nuanced explanations.

However this same complexity makes it even less useful as a predictive tool, and so as

a useful guide for negotiation practitioners.

Janosik[34] concludes by locating the above approaches to understand negotiation

behaviour within an even greater split in the field of negotiation theory. She cautions

however that this appeal should not prevent us from undertaking studies which rely on

rather more sophisticated notions of culture. Such approaches are messier but are

potentially more accurate and ultimately more rewarding.

An ideal negotiator has a quick mind, unlimited patience. He knows how to be modest

but assertive, how to mislead without being a liar how to inspire trust without

succumbing to their charms.[35] Peter A. Alces & David Frisch[36] in their publication

commercial codification as negotiation defines the process of negotiation as a process

involving both concealing and revealing. Negotiation is a process where maximum

and minimum expectations of the parties concerned have been changed gradually.

There are two ways to negotiate, either soft or hard.[37] The soft negotiator wants to

keep peace and readily makes concessions to avoid or resolve conflicts. The hard


negotiator sees conflict as a battle in which the person who takes the most extreme

position and holds out fares better. Gerard wrote of the type of personalities of soft

and hard negotiators. These variations in the two types of negotiators are given in the

table 2.3 below.

Table 2.3: Hard vs Soft Negotiation

Soft Hard

• Participants are friends • Participants are adversaries

• The goal is agreement • The goal is victory

• Trust others • Distrust others

• Make offers • Make threats

• Disclose your bottom line • Mislead as to your bottom line

• Yield to pressure • Apply pressure

• Try to avoid a contest of will • Try to win a contest of will

Philip Kotler[38] in his book of marketing management define negotiation as a process

where two or more parties try to buy/sell products or services and attempt to reach at

mutually agreeable conditions. According to Julia Tipler[39] negotiation is a journey

where parties need to know both the starting point and the destination.

Figure 2.2: Journey of Negotiation

Paul T. Steele and Tom Beasor[40] in their practice workbook ‘Business Negotiation’

refer to the negotiation process as a process through which parties move from their

initially divergent positions to a point where agreement may be reached. They further


speaks of the zone of agreement in a negotiation and presents the happenings through

flow chart as below:

Figure 2.3: Zone of Agreement in a Negotiation

‘Bywaters’[41] a UK based organisation was formed in 1982 specifically to assist

companies achieve substantial improvement in performance through the deployment

of strategies addressing four main level of change- people, process, direction and

markets. They claim that actions are just as important as words when negotiating. It is

essential to ensure balance between words and actions. They say that because much

communication is nonverbal, it can frame a positive negotiation environment. They

also advised never to enter a negotiation unless prepared to listen and make an

educated decision before reacting to an excitement. Decision should be based on the

objectives of the negotiation, not on the emotions. Clearly telling the other party that

this is a big decision, suggest the other party to think over such a decision. When the

time comes to negotiate, certain principles do apply. Mark H. Mc Cormark[42] in his

book ‘On Negotiating’ documents advice to potential negotiators. These are given in

Table 2.4


Table 2.4: Salient Advices to Negotiator

Advise to potential negotiator • Avoid showdowns

• Negotiate backwards

• Trade places

• Mollify then modify

• Deflect with a modify

• Question positions but don’t ignore them

• Sweeten his self-interest

• Keep your time frame to yourself

Chester L. Karrass[43], a worldwide leader in negotiation trainings states that the

strength of your agreements, understandings and relationships can make the

difference between success and failure. Weak agreements always break down. They

bring nagging dissatisfaction and aggravation into your business and personal lives.

Strong agreements help you reach and exceed your own objectives, while bringing

mutual satisfaction to all parties. Chester further states that whether you realize it, or

not, every time you interact with people even inside your own company you are

negotiating. Selling yourself and your ideas is a critical internal negotiation. The more

you understand about these negotiations, and are able to use them effectively, the

more successful you will become. Six qualities are illustrated in the next diagram for

a great negotiator. [44]


Figure 2.4: Six qualities of Negotiators

In his ‘Thoughts on Negotiation’ John F. Kennedy[45] says that only a couple of

decades ago the negotiations were viewed as two sides with seemingly opposing

objective and that the target was to gain as much as possible while giving as little as

possible. Negotiation is a universal human activity. Cohen[46] says that we all engage

in negotiation at one or more level on a regular basis and good negotiation skills are

needed at each and every level. Good negotiation skills are important in Business;

these skills are valuable in our personal lives as well. Julia Tipler[39] in the book

‘Successful Negotiation’ states that successful negotiation is an important

Communication skill and one can increase the gain and outcomes of a particular

business only by mastering the negotiation. Negotiating salary in profession or

negotiating for a large contract with supplier whatever the case may be, the guidelines

are the same. Danny Ertel’s[47] view of deal relationship cycle is given in the

following diagrams. In the usual way, exploitation of the deal by one party creates a

vicious circle of distrust and a withholding of information. Both the deal and

relationship eventually suffer. A zero sum mentality eventually prevails. In the better

approach, negotiation does not feel compelled to trade a good relationship for a good

deal. This leads to a virtuous circle of improved trust and deals satisfy the core

interests of all parties. The usual and better ways approach deal relationship cycles are

given below;


Figure 2.5: Deal Relationship Cycle (Usual Ways)

Figure 2.6: Deal Relationship Cycle (Better Approach)

Herb Cohen[46] in his book You Can Negotiate Anything says in every negotiation,

there are three crucial variables: power, time, and information. You can hold the best

hand at the table, but if you lack these three things, you’re still going to lose. Power is

the ability to get things done. If you can generate competition, for example, you’ll

have more power during negotiations. Power also comes from perceived expertise,

understanding the other person’s side, precedence, persistence, attitude, and

persuasion.


Most of all, you gain power when you’re willing to take calculated risks. Time also

plays a role. In negotiations, the side with the most time generally has an advantage.

Patience pays. No matter how pressed you are, you should always keep your cool,

maintaining an appearance of calm. “Your deadline is of your own making,” Cohen

writes. Don’t ignore deadlines, but don’t follow them blindly, either. Information is

the third crucial variable in negotiations. The more you know, the better your position.

Do your researches before negotiations begin and during negotiations, act on

whatever new info comes to light. Cohen is especially keen on picking up

unintentional cues from the other side. Their responses, their questions, and their

attitude all convey valuable information.

Communication behaviors in negotiation are characterized according the strategy used

during the negotiation.[48] The way in which strategies are formed and employed to

reach a goal is reflected in the form of the communication. Recent research suggests

that frequency, phasing, and sequencing of communications shape how settlement is

reached.[49] Each approach differs in terms of how the negotiation process is

characterized. The first way of characterizing negotiations is to view integrative and

distributive processes as separable approaches to the task [50]. Negotiators, initiate

their negotiations with the goal of maximizing joint gain use integrative tactics

proportionately more frequently, whereas negotiators, initiate their negotiations with

the goal of maximizing individual gain use proportionately more distributive tactics.

As a result of these early strategic choices, negotiators establish either an integrative

or a distributive dynamic for the entire negotiation. A second way of characterizing

the negotiation process is to view integrative and distributive strategies as

interdependent components of a single strategy.[50] Most of the negotiations have both

distributive and integrative elements, and that negotiators attempt to satisfy the dual

goals of maximizing joint and personal gain.[51][52] The third characterization of

negotiation processes is based on component of negotiation phases.[53][54][55][56] Phase

models are further classified in two types of models, stage models and

episodic models, according to the phases defined in the models.[55] Stage models

assume that negotiations pass through a series of predictable stages on the path to

agreement: issue definition, problem solving, and resolution.[56] Episodic models, in

comparison, look for unified periods of coherent activity, such as an uninterrupted

series of offers. Thus, a major distinction between stage and episodic models is that


stage models treat phases as fixed, whereas episodic models treat phases as flexible,

allowing variations in both their lengths and the order in which they occur.

Michal and Wayne[57] defined negotiation as an exchange between people for the

purpose of fulfilling their needs. It means that every negotiation is a trade. Every

negotiator has to give something to get something in return. This give-get exchange is

the activating force behind each and every negotiation. Michal and Wayne through

their book Negotiation-Art of getting what you want try to express how to negotiate in

such a way as to gain the most advantageous give-get exchange. They refer to the

variable in the negotiation process and these variables are presented in the following

illustration:

Figure 2.7: Negotiation Process

Negotiation is solution of the situation where two or more parties reach a position and

their interests or values come in conflict with one another.[58] There are several ways

in which to resolve the conflict. In the case of conflict if one party is significantly

more powerful, they could attempt to simply enforce their opinion on the other.

Otherwise both parties may choose option to involve an outside neutral party to

“mediate” the issue. Generally, the mediator’s role is that of a facilitator, bringing the

parties together and assisting them to work through the particular issue. Another tool

for conflict resolution involves the use of an “arbitrator.” There are generally two

types of arbitration; binding and non-binding. In both cases the arbitrator hears the

positions of both parties and then renders a decision. In binding arbitration, both

parties are “bound” to the decision. Under the non-binding case, either party is free to

disregard the arbitrator’s decision. According to him the collaborative style, also

referred to as problem-solving, integrative bargaining, or creating value, attempts to


reach agreement through creating options that are conducive to achieving or

maximizing the goals of both parties thus creating a “win-win” situation. Graphical

representation of the negotiation continuum given by Horst is shown in Figure 2.8.

Figure 2.8: Negotiation Continuum

Rubin describes five attributes linked to successful negotiators. First, effective

negotiators have the capacity to be flexible on the method to achieve their goals. They

establish their goals early on with an idea as to the general nature of the outcome but

remain flexible on the means for achieving these goals. Second, negotiators remain

sensitive to “social cues” (interpersonal sensitivity) given off by their counterparts

without being over-reactive to these observations. To ignore the cues may be to miss

out on important pieces of data. Conversely, to react too strongly risks misinterpreting

intentions based on personal bias. The third attribute is the negotiator’s

“inventiveness” or ability to develop creative solutions in order to strive for mutually

acceptable agreement. Patience is the successful negotiator’s fourth attribute. Rubin

attaches this trait to the negotiator’s ability to look beyond immediate gains with a

view on the long game. Finally, successful negotiators are tenacious especially in the

area of reconfiguring an “adversarial relationship into a more collaborative

arrangement”. Phases in the process of negotiation as per the “frames of reference”

are given below in the Figure 2.9.


Figure 2.9: Phases in the Process of Negotiation

Horst concludes that negotiation is an important and valuable tool for resolving

conflict when all parties involved have a shared commitment to reaching a

collaborative, joint outcome that satisfies both parties’ needs and interests.

Tomasz Wachowicz & Shikui Wu[59] in his paper “Negotiators’ Strategies and their

Concessions” analyze the problem of strategy formulation and concession making by

negotiators that took part in the Global Research on Inspire Negotiations (GRIN )

research project . Within this project 254 negotiators from Austria, Canada, Poland

and United States conducted bilateral business negotiation via the Inspire negotiation

support system.[9] According to them they negotiated a multi-issue problem including:

price, payment, delivery and returns; for which an additive scoring system was

proposed to evaluate the offers by means of a single aggregated criterion (utility).[60]

Having completed the negotiation process, each negotiator was asked to prepare a

written report describing her/his negotiation behavior, strategies and goals and giving

insights into their subjective evaluation of the negotiation process and system.

In this study negotiators were clustered into four classes of similarity using R’s

clustering analysis procedure, which allowed to identify within the set of GRIN

negotiators, the following four groups:


• 3VL – very little cooperativeness,

• 3H – highly cooperative,

• LC2I – little cooperativeness, but with intermediate level of in formativeness and

persuasiveness,

• IC2L – intermediately cooperative and a little informative and persuasive.

They referred to the five modes of conflict solving that position negotiators profile

within the two dimensional space of assertiveness and cooperativeness.

Figure 2.10: Five Modes of Conflict Solving

They concludes that operating with scoring systems requires from negotiators an

adequate mathematical preparation and basic knowledge of the effects it can cause on

the interpretation of scores.

2.2 e-NEGOTIATION

e-Negotiation improves the efficiency of settlements. It has the capability of suggest

the solutions within the seconds. Using e-negotiation negotiating parties can quantify

their preferences. e-Negotiation decreases the negotiation time and cost as compared

to traditional negotiation tactics. Parties involved in the negotiation are distant from

each other, an e-negotiation system can bridge this distance and provide the

negotiation with a task-related framework to communicate efficiently.

Research and design related to electronic negotiation came from academia, primarily

from three areas: management science, information systems and computer science.[61]


These three research areas contributed to the development of five types of systems; all

are illustrated in Figure 2.11 below:

Figure 2.11: e-negotiation systems

The first stage of the process is theoretical and applied research. In this stage

behavioral studies are conducted that verify theories and their components and

implementation. Implementation of verified theories increasingly takes more time in

research because of the necessity to use software and other systems in theory

verification and modification. Domain engineering is the second stage, which is

software engineering. This stage is further classified into two subsequent phases are

requirement analysis and software design as given in figure 2.12.

Figure 2.12: Stages of e-Negotiation System Development

Domain engineering provides the link between theoretical research and

experimentation and implements software engineering from the theoretical models

and experiments. Domain engineering may be viewed as both engineering and a part

of applied research. Kersten & Lai[61] aggregate a higher-level constructs of the

phases included in electronic negotiation for the description, analysis and design of


the system. The first-level constructs that are associated with the phases are given in

the Figure 2.13 as follows:

Figure 2.13: Phases in Electronic Negotiation

Above negotiation constructs can be used to describe the negotiation and its structure.

Kersten & Lai[61] also help in specifying the permissible negotiators’ behaviors and

conditions for their movement through the process; such a description is known as a

negotiator protocol.[62] Muller[63] suggests three categories of negotiation as shown in

the figure 2.14, which are useful in the discussion of protocols.

Figure 2.14: Categories of Negotiation


Development, exploration and use of ICTs are geared by the internet. Use of internet

changes the ways systems are developed, implemented and used. Kersten & Lai

propose to make a distinction between the two generations of negotiation systems and

related research and training:

(1) NSSs designed for a stand-alone computer or a local area-network and

(2) ENSs systems which use internet technologies and are deployed on the web.

These two broad categories are discussed from three following perspectives:

(1) real-life applications,

(2) systems used in business, research and training, and

(3) research results.

The development and applications of ENS are driven by new internet technologies

and the expanding access to data across the web, use of multimedia, use of software

services available on the web, new business models, and so on. Continuously growing

e-business, increasing importance of transactions conducted on the e-marketplaces,

exchange mechanisms and the related research should be explored from the intrinsic

change of both social and technical aspects and the interactive impact between them.

Michael Strobel[62] examined in his paper titled “Communication Design for

Electronic Negotiations on the Basis of XML Schema” the representation of

negotiations in electronic markets and their support is important issues in today’s e-

commerce research. However, an explicit negotiation design can also address how can

one ensure that the negotiating parties have the same understanding regarding the

issues that are subject to the negotiation? The solution this paper proposes is to

perform a communication design for electronic negotiations that explicitly specifies

the common syntax and semantics of the negotiating parties, the logical space of the

electronic negotiation.

Furthermore, XML Schema is suggested as the mechanism for the runtime

representation of the logical space and the validation of actual negotiations from a


syntactical and semantical perspective. On the basis of this approach, organisations

creating an electronic market or sellers who intend to offer their buyers the ability to

bargain can design and generate support mechanisms for electronic negotiations in

a flexible and efficient way. A magnitude of technologies can be used to build

electronic negotiation media. These technologies are core elements of development

efforts that have historically come to be known as negotiation support systems.

Figure 2.15: Negotiation Support Systems

�

Margaret J. Kersten, Marlene Haley and Gregory E. Kersten[64] conducted a research

study titled “Developing Analytic, Cognitive and Linguistic Skills with an Electronic

Negotiation System” to discuss the adoption and diffusion of Inspire for teaching

different types of courses, including English for Academic Purposes, English for

Specific Purposes (Engineering and MBA) and English Writing for Academic

Purposes. Inspire provides a platform and tools for negotiators to work together to

resolve their differences. The preparation for the negotiation and the conduct of the

negotiation in an asynchronous mode are designed to give the users control over the

process and the outcome of their negotiations. Exchange of offers, counteroffers and

messages creates a framework for a meaningful interaction, where results depend on

the user’s decisions and their ability to communicate effectively. Going through

different phases of the negotiation, the students develop analytic, cognitive and

linguistic skills better than others.


Hasan Al-Sakran and Irina Serguievskaia[65] in their article “A Framework for

Developing Experience Based e-Negotiation System” propose multi-agent distributed

electronic negotiation system, where the learning process is facilitated by using the

Case Based Reasoning (CBR) approach in combination with case database and

addition of ability to roam through a network allows considering outside options using

mobile agent technology. CBR is an AI methodology which combines re-use of the

past experiences with case base.

Cases similar to the current case at hand are retrieved from case base, revised and

used to develop new offers and counter-offers. Practical e-negotiation system should

not be built on the centralized decision making approach. In this work the possibility

of combination of centralized and decentralized decision making is explored. By

nature, there are usually previous negotiation cases. A lot of negotiations are

conducted repeatedly on the same or similar resources with similar issues, so identical

tasks are performed over and over again. In general, a negotiation agent knows its

principal’s preferences, but not the preferences of the opponent. It has to be able to

make reasonable decision based on incomplete information. One possible solution is

to use Case-Based Reasoning (CBR) approach, which allows an agent to learn from

previous experiences.

Figure 2.16: Case-Based Reasoning (CBR) Approach

The overall framework of the proposed negotiation system is presented in the figure

2.17 below. Proposed negotiation system consists of a number of agents. Each agent

is associated with a specific functional unit. The whole system requires three different


agent types, one mobile that is negotiator agent and two static agents: interface agent

and task agent.

Figure 2.17: Negotiation System

Application of cased-based reasoning in development of an effective e-negotiation

system can be applied to a wide range of negotiation situations. Modular approach of

the proposed system allows for development of a domain independent e-negotiation

system. By generalization of negotiation strategies a system that can manage both the

offers/counter-offers and the information may be developed.

Gregory E. Kersten, Jamshid Etezadi, Eva Chen and Rudolf Vetschera[66] in their

study “User Assessment of E-negotiation Systems” formulate an assessment Model

for Internet Based System (AMIS). Proposed model was used to determine factors

important in high user acceptance of the technology. This paper presents a follow up

study that uses structured equation modeling to verify AMIS and its empirical results.

The focus is on the examination of the user’s assessment of the system and their

intention to use it, while taking into consideration its key features. In addition, the

impact of gender is tested on the model to relate important differences in perceptions.


Figure 2.18: Assessment Model for Internet Based System (AMIS)

The AMIS model postulates that the construct results impacts constructs usefulness of

analytical tools and usefulness of communication. The exploratory results of the

AMIS model show that there is a significant correlation between the construct results

and usefulness of analytical tools, ease of use of analytical tools and ease of use of

system.

Gregory E. Kersten, Eva Chen, Jesus Rios and Stefan Strecker[67] conducted their

study “A Study on Preference Impartation and Decision Support in E � negotiation” to

determine that the effectiveness of methodological support depends on the numerical

preference values. According to the study preference information is transmitted in

qualitative terms to the negotiation agents, analytical support may be

counterproductive. Different aspects of decision making and negotiation may be

supported with analytical and communication tools. In this study the analytical

support is limited to preference elicitation, utility construction, and calculation of the

utility value for every offer exchanged. The communication support is limited to the

exchange of structured offers, free�text messages, and maintenance of the negotiation

transcript and graph showing the offer exchange process. The research model has two

independent variables: analytical support for the negotiation dyad and the preference

information mode.


Figure 2.19: Offer Exchange Process of Negotiation

The experiment involved a contract negotiation between an artist and an

entertainment company. One negotiator was the artist’ s agent and the second

negotiator represented the company. They concluded when analytical support was not

provided, there were no significant differences in the dyads’ performance between

preferences described quantitatively and only qualitatively. Thus, the inclusion of

numerical information to explain the principals’ interests for non�analytically

supported dyads seems to have no impact on the negotiation outcome.

ShiKui Wu and Rustam Vahidov[68] describe how the user perceptions of ENS

features influence the assessment of ENS. As ENSs are a type of information systems

(IS), it would be appropriate to begin with the well-known theoretical models related

to user perceptions of IS. The two widely cited models in this respect include the

technology acceptance model[19] and the IS success model[69]. The first one focuses on

user perceptions of system, while the second one measures user satisfaction. More

recently a model combining the two above-mentioned ones has been proposed.[70]

However, these models do not incorporate specific system features explicitly. In

regards to ENS assessment the important feature categories include communication

support (messaging), analytical support (preference modeling), and graphical support

(offer history). Authors looks to evaluate the influence of the ENS user perceptions of

these features on important constructs used in theoretical IS models. Proposed

research model includes the following independent variables related to system feature

perceptions:


• Perception of messaging function (PMF)

• Perception of offer-history tables (POH)

• Perception of offer graph representations (POG)

• Perception of offer ratings (POR )

Dr. Ernest Thiessen - Inventor of a patented E-Negotiation system called

Smartsettle[10], that has been designed to tackle complex water resource negotiations.

Smartsettle has been endorsed by world-renowned experts, was a topic of a United

Nations keynote speech, and is seeking involvement in the Nile Basin Initiative. Now

Smartsettle has developed a product suite well suited to pilot testing, tracking and

optimizing for a multitude of potential market applications…

Figure 2.20: Applications of Smertsettle

Smartsettle is applicable to virtually any negotiation between two or more decision

makers. The potential applications are endless. Research and development began in

1993 when the company was incorporated. Samartsettle provides services in two

variants:


Figure 2.21: Services provided by Smartsettle

Figure 2.22: Smartsettle Infinity

INSPIRE[9] is a Web-based negotiation support system. It allows for the specification

of preferences, assessment of offers, management of communication, graphical

display of the negotiation's progress, post-agreement analysis, and other functions.

The system is flexible and can be used as a game, a demonstration decision support


system (DSS), a negotiation simulator, a demonstration negotiation support system

(NSS), and a research and training tool. INSPIRE is developed for research and

training and using Inspire requires following a sound approach to negotiation that has

been proposed by experts, has been used by over 8,000 users, and is the cornerstone

of negotiation analysis. There are three basic phases of a negotiation: preparation,

conduct of negotiation, and post-settlement.

Participants in the negotiation are paired randomly and anonymously. Your partner

may be from your city, country or from far away: a different country, a different

continent. A user has to Login to the INSPIRE using user-name and password

provided through Inspire confirmation email that have been received after the

registration. Main steps that negotiator will follow during the process of negotiation

are shown on the welcome screen. Status of negotiation might be checked at any time

during the process of negotiation. Public Information is available to both parties

whereas private Information is only available to the party currently logged in but not

to the counterpart. 100 points are distributed among the various issues. The most

important issue gets the highest number of points; the least important issue gets the

least number of points. The points for all the issues must total 100. A use has to rate

the options for each issue by distributing the assigned number of points among all the

options of each issue.

Maximum number of points is given to the best option as per the negotiator’ s thinking

and zero to the one which is the worst for negotiator. A number of packages are

displayed for negotiator. Each package has a rating. Every offer (a package) which

negotiator wants to consider and present to the opponent will show a rating based on

the preferences of negotiator. Negotiator can also send messages to your counterpart

using the message-box. At any point negotiator may review the history of your

negotiations. When both the parties accept an offer, it is called an "agreement".

Inspire will tell you whether the agreement is "optimal", or whether it is possible to

improve it and move towards a better agreement through the post-settlement phase.


2.3 NEGOTIATION SUPPORT SYSTEM

Negotiation Support Systems (NSS) are dedicated decision support system that is

designed to assist negotiators in reaching mutually satisfactory decisions by providing

a means of communication and through the analysis of available information.

Whereas in the case of e-negotiation, negotiations can be performed through email or

other general electronic technologies, but there is an absence of dedicated negotiation

system that can only be used in negotiation process.

According to the website ‘dssresources.com’ [71] Negotiation Support Systems (NSS)

are designed to help the negotiators in decisions which are agreeable to each party by

providing a means of communication and through the analysis of available

information. Negotiation support may involve using a model-driven, data-driven,

communications-driven, document-driven or a knowledge-driven DSS. This sub-

category of computerized decision support systems is defined by the purpose of the

system.

Kersten and Lo[8] describe Negotiation Support Systems as "designed to help and

advise negotiators; they are used to structure and analyse the problem, elicit

preferences and use them to construct a utility function, determine feasible and

efficient alternatives, visualise different aspects of the problem and the process, and

facilitate communication."

Negotiation Support Systems are classified as process-oriented NSS, which focuses

on improving the negotiation process, and others are result-oriented NSS which

provide tools for improve the results of the negotiation. The result-oriented NSS have

tools to help decide upon offers and to help evaluate the offers received. Result-

oriented Negotiation Support Systems may be standalone systems used by the

bargainer or negotiator, bilateral systems used by both parties, or multilateral, used by

many parties to the negotiation. In general, there are general purpose and special

purpose NSS. Kersten noted "Negotiation support systems (NSS) cover a wide range

of individual and group decision support technologies. Many NSS have been

developed and used in training and research but they have been rarely used in

practice."


The use of information technology in negotiation support is required to achieve eight

goals. These goals include: enabling asynchronous negotiations, presenting advice,

providing checklists, reducing transaction costs, force to a bargaining positions,

arranging offers, administer negotiation data, and providing a negotiation process or

protocol. To meet all of these goals it is necessary to create multiple subsystems in a

Negotiation Support System.

Arnott and Pervan[72] suggests two approaches to constructing negotiation support

systems. These two approaches are problem oriented and process oriented. Problem-

oriented NSS products include Co-oP, DECISION MAKER, GDSI and MEDIATOR.

These problem-oriented systems focus on providing support to support negotiation for

specific problem types. On the other hand, process-oriented NSS focus on providing

general support of the give-and-take process of negotiation. Negotiation Support

Systems is not a new subfield related to decision support. There has been a

Negotiation Support Systems minitrack at the Hawaii International Conference on

System Sciences (HICSS) since 1991.

Yufei Yuan, Joseph B. Rose, Norm Archer and Suarga[73] has introduced a Web-based

Negotiation Support System CBSS. The system facilitates a structured on-line

negotiation process. It is written in JAVA language and can be accessed easily

through the Web. The system has been tested in comparison with face-to-face

meetings in simulated labour union-management negotiations. The test shows that

CBSS was viewed as a valid alternative to face-to-face negotiation, although

bargaining processes supported by CBSS were perceived to be slower than face-to-

face negotiation. According to the authors main objectives of CBSS are the following:

• Easy access through the Web. Two parties anywhere in the world should

be able to negotiate by accessing CBSS through the Web.

• Real-time communication and interaction. Negotiators should be able to

communicate with each other in real-time and interact in a variety of ways

such as hot-line co-ordination, message exchange, and working on

common documents.


• Structured negotiation process. Negotiation should be organised in a

wellstructured process including preparation, setting agenda, issue

discussion, and making the final agreement.

• Automatic documentation. The entire negotiation is automatically

documented. Negotiators should be able to review any issues that have been

discussed and any agreements that have been reached.

• Security and privacy. The system should be able to recover from system or

communication failure. Each party should have its private and shared

documents. All information that has been exchanged cannot be altered by

either party.

Frank Kohne, Mareike Schoop, and Dirk Staskiewicz[74] explored in his research titled

“ An Empirical Investigation of the Acceptance of Electronic Negotiation Support

System Features” that the role of advanced communication supports in

user’ s experiences. Through this paper authors try to inform the discussion of

technology acceptance regarding decision support systems. Regarding complex

negotiation cases and the application of NSSs we have the following hypotheses:

• In line with TAM/UTAUT, overall performance and effort expectancy

will significantly influence the users’ intentions of using NSSs.

• On a more detailed level, the users evaluate communication support and

analytical support offered by an NSS separately.

These two have to be tested before further inferences can be made. They are the

preconditions for the third hypothesis to follow. If either the TAM is not reasonably

predicting usage intentions in our sample or if users have a holistic perception and

evaluation regarding the different types of support features, testing specific features’

contribution to the prediction would not be meaningful. If the hypotheses hold, the

third hypothesis can be tested:

• The perception of the usefulness of communication support features in NSSs

will significantly determine users’ overall performance expectancy and

thereby their intentions of using NSSs.


Figure 2.23 summarises this idea. All other elements of the original model (i.e. age,

experience etc.) are disregarded here, because there is hardly any variance in the

present context due to the controlled experimental environment.

Figure 2.23: Technology Acceptance Regarding NSS

Alina Pommeranz, Willem-Paul Brinkman, Pascal Wiggers, Joost Broekens, and

Catholijn M. Jonker[75] described a scenario-based approach to gathering requirements

for such a system. They wrote five scenarios containing part of the envisioned

functionality in the most important use situations, e.g. face-to-face negotiation, on the

phone, collaborative or mobile preparation. They used claims analysis to clarify the

design decisions. Authors constructed 12 design guidelines for NSS. Overall these

guidelines boil down to the following overall insight:

the preparation phase of a negotiation and the actual negotiation with an opponent

require different interaction styles. The major implication of these guidelines is that

NSS need to have intelligence and reasoning capabilities in order to process the

information entered by the users and give personalized output. Participants were able

to directly reflect upon the potential usage of the NSS.

Joost Broekens, Catholijn M. Jonker and John-Jules Ch. Meyer[76] in their paper titled

“ Affective Negotiation Support Systems” , first argue that affect is an important issue

to consider when developing a negotiation support system. They do so by giving a

strategic overview of some of the most important findings in the affect-cognition and

affect-negotiation literature. Second, they show in a structured manner during which

phases in the negotiation process what emotion-related concepts play a major role, as

well as discuss more concrete affect-related support functions an affective negotiation


support system could offer. Third, they analyze the feasibility of these functions by

reviewing currently available affective computing technologies, such as affect

measurement, emotion modeling, emotion expression, emotional reasoning, and

emotional agents.

2.4 SOFTWARE AGENTS

Software agents are programs that carrying out computing tasks on behalf of the user

instead of a physical entity. Software agents are belongs to the concept of robots

within the Artificial Intelligence (AI) community. Agents can only do the requests if

they “ know” something about the context of the request.

“ In fact, the concept of “ agent” embodied in humans helping humans is often one

where expertise is indeed mixed with knowledge of you. A good travel agent blends

knowledge about hotels and restaurants with knowledge about you… A real estate

agent builds a model of you from a succession of houses that fit your taste with

varying degrees of success. Now imagine a telephone-answering agent, a news agent,

or an electronic-mail-managing agent. What they all have in common is the ability to

model you.” [77]

Software Agent a software entity which functions continuously and autonomously in

a particular environment, often inhabited by other agents and processes.[78]

“ An agent is anything that can be viewed as perceiving its environment through

sensors and acting on that environment through effectors.” [79]

“ Autonomous agents are computational systems that inhabit some complex dynamic

environment, sense and act autonomously in this environment, and by doing so realize

a set of goals or tasks for which they are designed.” [80]

“ An intelligent agent is software that assists people and acts on their behalf.

Intelligent agents work by allowing people to delegate work that they could have done

to the agent software. Agents can, just as assistants can, automate repetitive tasks,

remember things you forgot, intelligently summarize complex data, learn from you,

and even make recommendations to you.” [81]


“ [An agent is] a piece of software that performs a given task using information

gleaned from its environment to act in a suitable manner so as to complete the task

successfully. The software should be able to adapt itself based on changes occurring

in its environment, so that a change in circumstances will still yield the intended

result.” [82]

Software agents can’ t be defined with a single definition because of the abstract

nature and the incorporated potential functionality of software agents.[83][84][85] A

software agent is a program which is different from a standard subroutine or software

application due to the characteristics of software agents. Most of the software agents

have several common key characteristics that offer minimal requirements for software

to be classified as agent-like.

These characteristics are autonomy, reactivity, persistence and goal-orientedness.

Other characteristics such as mobility, interactivity and intelligence are also

frequently associated with software agents.

Autonomy is a characteristic that appears to be fundamental to most definitions of

software agents. A software agent senses its environment and acts autonomously upon

it. The interpretations of autonomy with regard to software agents vary slightly among

agent researchers. A software agent can initiate communication, monitor events, and

perform tasks without the direct intervention of humans or others. An agent be able to

“ pursue an agenda independently from its user” and take “ preemptive or independent

actions that will eventually benefit the user” .[83] Using the less restrictive definition, a

software agent could be a program executed initially by the user which would then

carry out its purpose independently.[84]

Reactivity is another key characteristic of agent behavior. Reactivity has been defined

as an agent’ s ability to perceive the environment and respond to changes in that

environment in a timely fashion.[86] A software agent responds in a timely fashion to

changes in its environment. This characteristic is crucial for delegation and

automation. The general principle on which software agents operate is “ When X

happens, do Y,” where X is some system or network event that the agent continually

monitors.[81] In reacting to the environment, the agent extends its autonomy by


carrying out actions in response to context changes, without intervention from the

user.[84]

Continuity is key characteristic, which qualifies a software program to work as an

agent-like. The idea is that once a task or goal has been delegated, it is up to the agent

to work tirelessly in pursuit of that goal. Software agents must run or execute

continuously and are frequently referred to as continuously perceiving their

environment. The length of time for which a software agent may persist varies

depending upon the task that the agent was assigned to carry out. This feature is often

implemented by providing the agent with its own thread of execution and using a loop

to keeps the agent running.

Agents are goal-oriented they “ realize a set of goals or tasks for which they were

designed” [80]. An agent can accept high-level requests specifying the goals of a human

user (or another agent) and decide how and where to satisfy the requests. Their

reactivity must be tempered such that agents are not continuously running programs

that simply react to changes in the environment. Agents should be single-minded and

proactive in carrying out their assigned task. In some cases, an agent can modify the

goals or establish goals of their own.[86]

The concept of goal-orientedness is further refined by Covrigaru and Lindsay[87] in

their article Deterministic autonomous systems. They classify goal of software agents

in two types of goals, homeostatic and achievable goals. Homeostatic goals are

continuously pursued whereas achievable goals are not continuously pursued; the

achievement of the final state marks the termination of the goal.[87]

Agent mobility is achieved by transmitting the agent to a remote location. A mobile

agent is a software agent program that is transmitted, as a whole, to a remote location

where it executes. The entire program is transmitted to the remote server, including its

“ code, data, execution state, and travel itinerary” [88]. Mobile agents can be transmitted

to multiple remote servers by using a schedule of tasks or by being transmitted to

another server by an agent server. If remote servers are unavailable agents can wait at

server until the server is accessible and complete their tasks using continuity

characteristics.


Support and security issues are considerably explored in the environment of mobile

agents. Security issues that must be covered at the time of development of an agent

system including the authorization that which agents should be given access to the

server and which files should be made accessible to these agents. Mobile agents can

facilitate the exchange of data and processes among different applications and

inherently provide distributed processing due to their ability to execute on remote

sites. In an agent-enabled network, each node can serve and support agents, providing

peer-to-peer functionality. Client stations can host mobile agent executions reducing

network traffic and server overload.

Agent communication is the ability of the agent to communicate with the other agents

or with human beings.[84] Efficiency of an agent can be improved through cooperation

and delegation, if they can exchange information with other agents. Agents have been

created in various programming languages but most of the agents were developed in

Java. A common programming environment is required for the development of agents

to overcome the integration and compatibility related problems. An agent

communication language (ACL) has been developed by the Knowledge Sharing

Effort, a joint initiative of several research groups, to provide a means for

communication among agents developed in different programming environments for

different purposes or domains.[89] ACL creates a common semantic base and prevents

the use of synonyms to describe similar facts through its three components, a

“ vocabulary, an inner language called Knowledge Interchange Format (KIF) and an

outer language called the Knowledge Query and Manipulation Language

(KQML)” .[90]

IBM describes intelligence of agents as the “ degree of reasoning and learned

behavior: the agent’ s ability to accept the user’ s statement of goals and carry out the

task delegated to it.” [91] Imam and Kodratoff describe an intelligent agent as a “ system

or machine that utilizes inferential or complex computational methodologies to

perform the set of tasks of interest to the user.” [92] Intelligence is an enabling feature

that allows an agent to pursue its goals more efficiently with less assistance from the

user or designer.

One of the most common examples of learning agents is the wizards found in many

commercial software programs (e.g., in Microsoft Office applications). Learning


agent watches user’ s actions just from its initialization and add user’ s habits and

preferences to its knowledge base in the form of rules to reflect the individual

preferences of the user.[80] A learning agent can independently carry out tasks for the

user With this form of intelligence, a well-trained agent can independently carry out

tasks for the user and react to its environment appropriately.

Lashkari, Metral, and Maes[93] created an agent that is able to assist the user with the

filtering and filing of e-mail by allowing the agent to learn from other agents. The

agent may need to watch the user’ s actions in dealing with over 100 e-mail messages

before it is reasonably confident in its recommendations to the user. By interacting

with another user’ s previously trained e-mail agent, the required training time for the

new agent can be reduced. In Maes’ study, a trained agent shared information with

regard to how its user dealt with e-mail from a specific source. The newer agent was

able to use this knowledge when its user received e-mail from the same type of source

and was able to reach a reasonable confidence level almost immediately.

A user can assign a task to an agent and need not to monitor how or whether the agent

will accomplish the task. The reactive and continuity nature of the agent should

ensure that it completes its goals and updates the status to its user or other program as

the case may be. The use of agents as a user interface abstraction can provide an

alternative means of desktop manipulation. Limitations of the direct manipulation

interface include scalability and level of expertise. As the volume of information at

our fingertips increases, the hierarchy of files and links on our desktops becomes too

deep to negotiate efficiently. Less experienced computer users often have a difficult

time navigating through feature-rich interfaces.

Agents are useful within the user interface environment because they can react to the

actions of the user, providing assistance in response to various events. Intelligent

agents can learn the preferences of the user, and thus can provide a personalized

interface to each user. The functional decomposition that occurs in delegating tasks to

agents results in software modules that are responsible for specific tasks. This

modularity makes it easier to locate logic errors and extend applications. While users

appreciate the benefits of interface and interoperability abstraction, software

developers appreciate the reusability and modularity inherent in agent-based software

design.


2.5 CONCLUSIONS OF LITERATURE REVIEW

On the basis of exhaustive literature review presented here, salient conclusions have

been drawn;

1. One area of the research has relatively unexplored yet, this unexplored

research area is pertain to the identification of factors that affect the adoption

of e-negotiation through software agent.

2. Adoption of new technology is also an important area to research as it

provides valuable information to researchers for developing relatively better e-

negotiation systems.

3. In order to explain the adoption of electronic negotiation through software

agent, researchers need to determine the factors that would affect the adoption

of electronic negotiation and after the determination of such factors

researchers need to develop a model related to the unique context of electronic

negotiation.

4. Most of the research works in the electronic negotiation and negotiation

support system have been focused on the design and development of

electronic negotiation systems, negotiation and culture, decision support in

negotiation and on commercially available negotiation systems.

5. Another contextual difference is that most of the past studies have focused on

special purpose negotiation systems, i.e. that the developed systems are

worked for a specific type of negotiation problems, for example some systems

are worked only for insurance claims and some for real estate, mergers and

acquisition etc.

The salient conclusions drawn here will be the basis of the present research as given

below;

1. The area of electronic negotiation through software agents is still in its infant

stage and commercially unavailable. Therefore, the electronic negotiation

model that is developed in the present study will take this context into account,

i.e. the concept will be very new and thus such things as pre-formed opinions

or views etc. will not exist for such a technology.


2. The present study will focus on adoption of electronic negotiation through

software agent is not bound to a specific case of negotiation. Determined

factors that affect the adoption of electronic negotiation are same for every

case of negotiation and similar for most of the product domains. Also there has

not been any organizational level recognition is needed to use electronic

negotiation through software agent because of its infant stage in the

development.

3. Through this study, researchers will contribute to the electronic negotiation

literature by determining the factors that would affect the adoption of

e-negotiation.

By studying these factors, it is hoped that valuable contribution will be extended to

researchers for developing electronic negotiation systems that can improve e-

negotiation technologies. Contribution to the technology acceptance literature through

this study is introduction of electronic negotiation model that explains the adoption of

a relatively new technology.

Relatively new technologies differ from mature ones in sense that they typically are

not commercially available and that they lack any requirement of mandatory usage.

Further, an electronic negotiation model that explains adoption of e-negotiation

through software agent, which is an entirely new context versus the framework of

techniques assessed in the past studies. This work is also important for future studies

on adoption of other new technologies, which are under development and can be used

as theoretical framework for such studies.

chapter 2 review of literature -...

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