Analysis of Negotiation Dynamics

The process of reaching an agreement in a bilateral negotiation to a large extent determines that agreement. The tactics of proposing an offer and the perception of offers made by the other party determine how both parties engage each other and, as a consequence, the kind of agreement they will establish. It thus is important to gain a better understanding of the tactics and potential other factors that play a role in shaping that process. A negotiation, however, is typically judged by the efficiency of the outcome. The process of reaching an outcome has received less attention in literature and the analysis of the negotiation process is typically not as rigorous nor is it based on formal tools. Here we present an outline of a formal toolbox to analyze and study the dynamics of negotiation based on an analysis of the types of moves parties to a negotiation can make while exchanging offers. This toolbox can be used to study both the performance of human negotiators as well as automated negotia-