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Abstract(s)
Decisions in society resulting from negotiation among two parties
are often inefficient (in terms of Pareto efficiency) as the parties fail to identify
an agreement that would make both better off. A third party mediating the
negotiation can increase the chances of reaching a Pareto efficient alternative.
However, in most practical situations the mediator does not have a precise
model of the parties’ preferences, and therefore cannot identify which
alternatives are efficient. This paper assesses the performance of decision rules
that a mediator can apply in multi-issue bilateral negotiation analysis given
ordinal information about the importance of the issues and the value of the
potential alternatives in each issue. We assume the preferences of the parties
can be modelled by an additive multiattribute value function, but without
assuming the precise parameters of this model are known. We study three
mediation criteria: maximising the sum of the values, maximising the product
of the excesses, or maximising the minimal proportion of potential.
Monte-Carlo simulation is used to assess how good the alternative chosen by
each decision rule is, and to provide guidelines about the use of these rules in a
context of selecting a subset of promising alternatives.
Description
Keywords
negotiation mediation multiattribute value/utility theory MAVT/MAUT incomplete information ordinal information simulation