Multiple local optima in Zeuthen–Hicks bargaining: an analysis of different preference models

Dias, Luís C.; Vetschera, Rudolf

doi:10.1007/s40070-018-0089-0

Cited by 5 publications

(3 citation statements)

References 27 publications

(27 reference statements)

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“…unique, which is the case e.g. if both utility functions are concave (Dias and Vetschera 2018), the process will thus converge to the Nash bargaining solution. Since d is the worst possible outcome, we can without loss of generality set u m (d) = 0 and simplify 7to…”

Section: About Function P()mentioning

confidence: 98%

Zeuthen–Hicks Bargaining in Electronic Negotiations

Vetschera

2018

Group Decis Negot

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We apply the Zeuthen-Hicks bargaining model in an empirical study of electronic negotiations. Using a typology of bargaining steps based on that model, we study to what extent actual steps conform to the predictions of the model, and the effects of conformity with the model on bargaining outcomes. Results indicate that the model predicts bargaining steps only slightly better than chance, but that steps conforming to the model lead to outcomes that are closer to the efficient frontier, closer to the Nash bargaining solution, and provide higher utility to the party using such steps.

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Section: About Function P()mentioning

confidence: 98%

Zeuthen–Hicks Bargaining in Electronic Negotiations

Vetschera

2018

Group Decis Negot

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“…These shapes can be used as an input for sensitivity and robustness analysis studies addressing unknown value functions, as performed in exact (e.g., Sarabando and Dias 2010) or stochastic analyses (e.g., Lahdelma and Salminen 2001). Although the specific value function might be unknown, one may wish to simulate specific value function types (Dias and Vetschera 2019b, a). They can also be useful in studying the behavior of different methods on simulated data (Vetschera et al 2014a;Mihelčić and Bohanec 2017;Dias and Vetschera 2019b).…”

mentioning

confidence: 99%

“…Although the specific value function might be unknown, one may wish to simulate specific value function types (Dias and Vetschera 2019b, a). They can also be useful in studying the behavior of different methods on simulated data (Vetschera et al 2014a;Mihelčić and Bohanec 2017;Dias and Vetschera 2019b). Finally, they can be used in studies aiming to forecast the diffusion of new products and technologies using system dynamics or agent based models (e.g., in the context of alternative fuels (Stummer et al 2015;).…”

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confidence: 99%

Choice-based preference disaggregation concerning vehicle technologies

Dias

Oliveira

Sarabando

2021

Cent Eur J Oper Res

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The preference disaggregation paradigm in multi-criteria decision analysis allows inferring a multicriteria preference model for decision makers from their holistic judgments. In the wellknown additive value function framework, preference disaggregation methods infer parameters that define the value functions for the multiple criteria. The present work addresses the use of choice-based multiple questions, rather than eliciting a ranking or a classification of alternatives as typically done. It proposes simple mathematical formulations to obtain the most typical valuefunction shapes (concave, convex, or S-shaped) and a post-optimization step to avoid extreme cases. These methods are applied in an empirical study concerning the preferences of a population towards vehicle technologies. Over a hundred potential vehicle buyers in Portugal were interviewed in person. The analysis examines to what extent respondents are consistent, what do their value functions inferred from choice-based questions look like, and how well do these functions represent their preferences for alternative vehicle technologies. Respondents were found to be frequently inconsistent in their answers to choice-based questions. However, the inferred value functions reproduced their choices with a relatively small internal error. Requiring the value function to have a typical shape did not increase error in general. The post-optimization step contributes to decrease the difference among the criteria weights and matches better the preferences displayed by the respondents when performing an additional task based on a detailed elicitation process.

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Two-party Bargaining Processes Based on Subjective Expectations: A Model and a Simulation Study

Dias

Vetschera

2022

Group Decis Negot

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This work presents a model for a two-party bargaining process in which multiple offers are exchanged as the negotiation goes on, under a risk of breakdown. Typical game theoretical analyses of such settings assume the breakdown risk is known and the parties are able to calculate an initial offer that is immediately accepted by the other party, ending the negotiation. Aiming to develop a model that is closer to real-life situations, in which parties do exchange many offers in a bargaining process, we consider the parties are unable to compute the far-reaching consequences of their offers, and are guided by their subjective expectations of the outcome of the negotiation. This introduces a new perspective to the analysis of two-party bargaining processes: the confidence of the bargainers in terms of what they hope to achieve by bargaining with each other. The resulting model can be seen as an extension of the Zeuthen-Hicks bargaining model. We show analytically that under the assumption of concave utilities of both parties, the bargaining process converges to the nonsymmetric Nash bargaining solution, where the asymmetry is caused by differences in expectations. This result provides a new interpretation of the parameters of the nonsymmetric Nash bargaining solution, linking them to behavior in the bargaining process. As an additional contribution, we perform a simulation study to examine the role of confidence and to analyze the outcomes for non-concave utility functions.

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Multiple local optima in Zeuthen–Hicks bargaining: an analysis of different preference models

Cited by 5 publications

References 27 publications

Zeuthen–Hicks Bargaining in Electronic Negotiations

Zeuthen–Hicks Bargaining in Electronic Negotiations

Choice-based preference disaggregation concerning vehicle technologies

Two-party Bargaining Processes Based on Subjective Expectations: A Model and a Simulation Study

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