Computer-supported negotiations: an experimental study of bargaining in electronic commerce

The expanding business-to-business (B2B) e-commerce market has created a need for firms to negotiate business deals online. Negotiation support tools are likely to play a more critical role in B2B e-commerce. Notwithstanding their importance, the impacts of negotiation support tools (especially automated bargaining agents) are not well understood. This research addresses this gap by conducting a series of laboratory experiments to investigate the impact of web-based electronic messaging, web-based negotiation support systems (NSS), and autonomous electronic bargaining agents (EBA) on the outcomes of a multi-issue, ecommerce negotiation. Two types of bargaining situation were investigated: integrative and distributive bargaining. Negotiation outcomes were assessed using joint profit/utility outcome, contract balance, and the closeness to the efficient/Pareto frontier and the Nash bargaining solution. Findings show that web-based NSS can significantly improve efficiency and fairness in remote integrative negotiations but not in distributive negotiations. EBA were found to achieve outcomes comparable to but not significantly better than unassisted human dyads. Implications for NSS and EBA implementation and research were drawn.