Distributed Rational Decision Making 5.1 Introduction

Automated negotiation systems with self-interested agents are becoming increasingly important. One reason for this is the technology push of a growing standardized which separately designed agents belonging to diierent organizations can interact in an open environment in real-time and safely carry out transactions. The second reason is strong application pull for computer support for negotiation at the operative decision making level. For example, we are witnessing the advent of small transaction electronic commerce on the Internet for purchasing goods, information, and communication bandwidth 29]. There is also an industrial trend toward virtual enterprises: dynamic alliances of small, agile enterprises which together can take advantage of economies of scale when available (e.g., respond to more diverse orders than individual agents can), but do not suuer from diseconomies of scale. Multiagent technology facilitates such negotiation at the operative decision making level. This automation can save labor time of human negotiators, but in addition , other savings are possible because computational agents can be more eeective at nding beneecial short-term contracts than humans are in strategically and com-binatorially complex settings. This chapter discusses multiagent negotiation in situations where agents may have diierent goals, and each agent is trying to maximize its own good without concern for the global good. Such self-interest naturally prevails in negotiations among independent businesses or individuals. In building computer support for negotiation in such settings, the issue of self-interest has to be dealt with. In cooperative distributed problem solving 10, 7], the system designer imposes an interaction protocol 1 and a strategy (a mapping from state history to action; a 1. Here a protocol does not mean a low level communication protocol, but a negotiation protocol which determines the possible actions that agents can take at diierent points of the interaction. The sealed-bid rst-price auction is an example protocol where each bidder is free to submit one bid for the item, which is awarded to the highest bidder at