Negotiation basicConcept

Negotiations: Theoretic Fundamentals

 * Refer to main article: Negotiations: Theoretic Fundamentals

The Negotiation Management Platform (NMP)


The NMP provides the following functionality:
 * Big contractors can announce negotiations and select the negotiation protocol
 * Brokers can participate in announced negotiations
 * The NMP executes the negotiation according to the selected negotiation protocol
 * If the negotiation finishes successful an agreement is stated

Communication Infrastructure (Server architecture)

 * Refer to main article: Negotiations: Communication Infrastructure

Todo: describe communication patterns and interfaces between: Broker <-> Negotiation Management Platform <-> Big Contractor

Use exisiting interfaces for brokers. Connect big contractors internally on the server.

Defining the Individual Negotiation Scenario
The negotiation scenario is defined by the business domain, the business model of the platform as well as its customers and implicit, exogenous effects.

Following characteristics and requirements can be identified:
 * One-to-many relationship
 * Market power on contractor side, competition on broker side


 * Dynamic market: Periodical contracting phases


 * Good: energy for a certain time intervall, can exhibit private valuation


 * High volumes per transaction, probably long contract durations


 * Time limit for negotiation process


 * Business model of platform: (non-profit), neutral, fair access, attract contractors


 * Need for automation: negotiations can be conducted by software agents

The First Negotiation Protocol: English Auction (MARAN)
The one-to-many relationship (multi-bilateral) offers the possibility to use an auction based approach to implement the negotiations.
 * Detailed description for this auction mechanism: Negotiation Auction Mechanism: MARAN
 * For details of the implementation refer to the page Auction Negotiation Protocol

Instead of dealing with multiple one-to-one negotiations the highest offer from a broker in the last bidding round can be used as a minimal counteroffer to all counterparts in the next round.

Bellosta, Kornman and Vanderpooten (2008) give an example how to design an english auction with multi issues and a one-to-many relationship.

The auction based approach allows for a complete automation of the producer/consumer side as the process and the rules for the allocation are fixed.

This is the basic sequence flow according to the auction protocol:





Integration of the Negotiation Phase into the Execution Environement
The integration of the negotiation phase influences the existing design of the Execution phase.

After an agreement has been reached, the output of the contractor has to be assigned to the winning broker for negotiated time duration. In the following execution phase(s) the winning broker has to receive the associated forecasts for the acquired products.

If the competition reaches the specified product time the broker has to receive a corresponding depotPosition that will be positive if he acquired a product from a producer and negative if he acquired a product from a customer.

In contrast to the current version 0.7 the broker has to manage his depot in a way that he possesses the negative amount of the forecasted value.

So when the product time is reached the optimal outcome is:

incoming depotPosition + depot balance of broker = 0