An Auction-Based Negotiation Protocol for Agents with Nonlinear Utility Functions

14 Pages Posted: 27 Feb 2006

See all articles by Takayuki Ito

Takayuki Ito

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Mark Klein

Massachusetts Institute of Technology

Hiromitsu Hattori

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: February 2006

Abstract

Multi-issue negotiation protocols have been studied widely and represent a promising field since most negotiation problems in the real world involve multiple issues. The vast majority of this work has assumed that negotiation issues are independent, so agents can aggregate the utilities of the issue values by simple summation, producing linear utility functions. In the real world, however, such aggregations are often unrealistic. We cannot, for example, just add up the value of car's carburetor and the value of car's engine when engineers negotiate over the design a car. These value of these choices are interdependent, resulting in nonlinear utility functions. In this paper, we address this important gap in current negotiation techniques. We propose a negotiation protocol where agents employ adjusted sampling to generate proposals, and an auction mechanism is used to find social-welfare maximizing deals. Our experimental results show that our method substantially outperforms existing methods in large nonlinear utility spaces like those found in real world contexts. Further, we show that our protocol is incentive compatible.

Keywords: Multi-Issue Negotiation Protocols, Agents with Nonlinear Utility Functions

Suggested Citation

Ito, Takayuki and Klein, Mark and Hattori, Hiromitsu, An Auction-Based Negotiation Protocol for Agents with Nonlinear Utility Functions (February 2006). MIT Sloan Research Paper No. 4597-06, Available at SSRN: https://ssrn.com/abstract=886786 or http://dx.doi.org/10.2139/ssrn.886786

Takayuki Ito

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States

Mark Klein (Contact Author)

Massachusetts Institute of Technology ( email )

77 Massachusetts Avenue
MIT E94-1505
Cambridge, MA 02139
United States
617-253-6796 (Phone)

HOME PAGE: http://cci.mit.edu/klein/

Hiromitsu Hattori

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States

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