Negotiation Theoretic Fundamentals

Definition

 * A negotiation is an iterative communication and decision making process between two or more sides (parties) 


 * represented by two or more agents who cannot achieve their objectives through unilateral actions and who 


 * search for a consensus decision.

In TAC Energy we will concentrate on trade negotiations:


 * Trade negotiations are negotiation processes in electronic markets for the exchange of goods and services 


 * based on bargaining, bidding, or dispute resolution, and do not take into account non-commercial domains 


 * (politics, legal disputes) or other forms of negotiations such as group decision-making or voting.

The definitions refer to (Bichler et al. 2003) and (Ströbel and Weinhardt 2003).

Electronic negotiation process model
Based on the media reference model the montreal taxonomy (Ströbel and Weinhardt 2003) structures a negotiation process as follows:

1. Intention phase 2. Agreement phase
 * offer specification
 * offer submission
 * offer analysis
 * offer matching (possibly scoring, selection, resolution of conflict)
 * offer allocation
 * offer acceptance

Design the negotiation mechanism
The categorization above can be used to derive the negotiation rules (explicit, endogenous criteria) considering the following process:



When we want to define the negotiation rules, first we have to identify the business context of the negotiation platform plus implicit factors that influence the negotiations.

In the next step it has to be determined which objectives should be achieved in the negotiation process considering the edogenous implicit criteria.

Based on these preliminary steps the endogenoues, explicit criteria that specify the negotiation rules can be set.