Designing Bidding StrategiesDmytro Tykhonov

Counter-offer?

Seller

Price: €500,000

Buyer

Genius

Strategies

Preferences

buyer

seller

Opponent Preferences?

Open ClosedPartially shared

Outcome Space

My Utility

Util

ity o

f Opp

one

nt

Paretofrontier

Price: €500,000

Price: €300,000

Price: €350,000

5

Fundamental Problem of Negotiation

My Utility

Util

ity o

f Opp

one

nt

My Utility

Util

ity o

f Opp

one

nt

Agreement

Learn opponent’s preferences

Adapt strategy

6

Predictable versusUnpredictable Preferences

Predictable preferences• Most people prefer to have

more rather than less money.

Monotonic preference Logarithmic curve for money

Unpredictable preferences

• I like blue more than red, you like red more than blue.

Varies from person to personNot quite as well-behaved

money

utility

red

utility

blue green …

• Higher > Lower Grade• Less > More Work

• Peugeot > Ford• Swim > Cycle Ride

Learn opponent’s preferences

Learning Model of Opponent Preferences

My Utility

Util

ity o

f Opp

one

nt

Negotiation moves by Opponent

Util

ity

Hypotheses

delivery date

Learn opponent’s preferences

Nice Matching Strategy

My Utility

Uti

lity o

f O

pp

on

en

t

matches

Next bid on the Pareto

Pareto efficient frontier

Mirrored bid

Adapt strategy

Response to a selfish move

My Utility

Util

ity o

f O

ppon

ent

matches

Next bid on the Pareto

Pareto efficient frontier

Adapt strategy

Human vs Computer Negotiations

GENIUS

Future Work

• Explanation of bidding advice: • here is a trade-off• signaling (tit-for-tat)

• Multi-party negotiation

• Improving the strategy

• Competition of negotiating agents in GENIUS