Communication | Business communications » Negotiation, Review of Literature

Source: http://www.doksinet Page 15 CHAPTER 2 REVIEW OF LITERATURE A literature review is a description of the literature relevant to a particular field or topic. It gives an overview of what has been said, who the key writers are, what are the prevailing theories and hypotheses, what questions are being asked, and what methods and methodologies are appropriate and useful. As such, it is not in itself primary research, but rather it reports on other findings. Four main streams of research support in the present study have been discussed within this document: (1) Negotiation, (2) e-Negotiation, (3) Negotiation Support Systems, and (4) Software Agents. This literature review is thus composed of four sections that provide a general summary of these respective research areas. Within each section, a brief history of the research topic is provided, fundamental concepts relating to the topic are discussed, and then aspects of the topic that relate specifically to the objective of the

present study. 2.1 NEGOTIATION According to the Oxford dictionary negotiation is a formal discussion between people who are trying to reach an agreement.[24] A contract is prepared in negotiation Need theory is applicable to all approaches of negotiation and also each and every level of approach. Nierenberg & Zeif[1] in their ‘The Complete Negotiator’, say that when negotiator deeply analyze the techniques of negotiation and found that under each need are seen to repeat certain forms called the varieties of application of the need. Source: http://www.doksinet Chapter 2: Review of Literature Page 16 They have divided these needs in to six groups. The following varieties of applications are placed in an order corresponding to the amount of positive control that we may ordinarily have over each negotiating applications in a particular life situation. A negotiator is working for the opponent and has more control over his working. 1. Negotiator work towards the direction of

opponent’s needs 2. Negotiator work towards his own needs 3. Negotiator works towards the opponent’s need as well as his own needs 4. Negotiator works against his needs 5. Negotiator works against the opponent’s needs 6. Negotiator works against the opponent’s & his own needs Some valuable tips for negotiators to getting ‘yes’ from the opponent are given by Roger Fisher, William L. Ury & Bruce Patton[25] in their book ‘Getting to Yes: Negotiation agreement without giving in’. These tips are summarized in the following Table 2.1 Table 2.1 : Valuable Tips for Negotiation 1. Don’t bargain over position 2. Separate the people from the problem 3. Focus on interests, not position 4. Invent options for mutual gain 5. Insists on using objective criteria 6. What if they are more powerful 7. What if they want to play 8. What if they use dirty tricks Source: http://www.doksinet Chapter 2: Review of Literature Page 17 According to G.T Savage, JD Blair, and RL

Sorenson[26] the negotiator should consider both relationship and facts when negotiating strategically. According to them negotiation is a basic, generic human activity. They say that negotiation can work as a dispute management process to keep peace and to end a strike in business during the business deals like merger and sales of business. They advise the negotiator to dramatize the need for bargaining and its capabilities as a dispute management process. Conflicts in business can be easily resolved by using negotiations Negotiation, in its broadest implication is seen as an alternative to conflict & friction at interpersonal, Organizational & International levels. Bob Randall[27] in buyer’s survival guide suggests how to negotiate by being able to calculate the dealers actual cost factors, and how to control the sales process. Negotiators who find themselves in bargaining situations need certain behaviour and skills to be effective in that situation. The most important

skills required in such situation are perception and planning skills, knowledge of subject matter being negotiated, ability to think clearly and rapidly under pressure and uncertainty, ability to express thoughts verbally, listening skills, judgment and general intelligence, integrity, ability to persuade others, and patience.[28] Some of the circumstances are listed below where negotiation is an appropriate choice for concluding a sale. 1. When many factors bear not only on price, but also on quality and service 2. When business risk cannot be accurately predetermined 3. When a long period of time is required to produce the items purchased 4. When production is interrupted frequently because of numerous change order Outcome of a negotiation is affected by the professional way in which the discussions have been conducted and reflects on negotiator and the negotiator’s company. Roy J Lewicki and Joseph August Litterer[29] conclude in their book ‘Negotiation’ that a negotiator

requires a good foundation for any further dealing that he may need to have with the other person. An experienced administrator and one, who has observed negotiations and dispute resolution in a large variety of contexts, begin their task by thinking about the purpose of the negotiation. A successful negotiator understands what the facts are, what the power structure is, what the motives of various parties are. The successful negotiator has to be able to understand his interests. He must have basic understanding of the rules that are Source: http://www.doksinet Chapter 2: Review of Literature Page 18 applicable to that particular dispute. Robert Coulson[30] illustrated the criteria for reviving negotiation through the following flow chart: Figure 2.1: Criteria for Reviving Negotiation Roger Fisher and Danny Ertel[31] in their book Getting Ready to Negotiate agreeing on a deal is only part of the commercial relationship. Keeping the deal via implementing it is also important for

the success. They further advised not to just complain but to negotiate remedies. Negotiations are of supreme importance in ensuring effective teamwork, negotiation must be carried out in a systematic process. The negotiation process involves the following four steps; 1. Prepare - negotiation can t begin until each party knows what they want 2. Debate - discovering the other side s wants takes up to 80% of the negotiation 3. Propose - each side signals what wantsthey could trade 4. Bargain - the parties state the specific wantseach will trade. Gavin Kennedy[32] states that such an approach takes very short time view of the relationship between the negotiating parties, and means that the next time negotiator have to deal with the other party the discussion will be coloured on both sides by a desire to settle scores from last time. If negotiator “Lost” last time, he will be motivated to try even harder next time to outdo the people you are dealing with. Current emphasis in

negotiation is on building relationships and this means cost cannot be the sole criterion for a deal. According to Lewicki, Saunders and Minton[33], in any negotiation the need to build relationships must also be considered that continue for a long time with both parties feeling satisfied where problems can be sorted out amicably and where future negotiations can be conducted in an atmosphere Source: http://www.doksinet Chapter 2: Review of Literature Page 19 of mutual interest and support. Who, what, when and where of the negotiating process are described in Table 2.2: Table 2.2 : Negotiation Process Demand Who? Who is to Offer make Who benefit, if the Who get hurt, if the decision? What? Threat Exactly, decision is made? decision is not made? what If the decision is made, If the decision is not decision is desired? what benefit / costs can made, be expected? what risk / potential benefits can be expected? When? By what time does When if ever will the How soon

will the the decision have to benefit of making the consequences of not be made? decision occur? making the decision be felt? Why? What makes this a What right, proper lawful decision? makes these What makes these and consequences fair and consequences fair and legitimate? legitimate? The relation between culture and negotiation styles has been the topic of much investigation and research in recent times. The term "culture" is understood differently by different authors. These different notions of culture yield different understandings of the culture-negotiation link. ‘Rethinking the culture-negotiation link in negotiation theory and practice’ of Negotiation Journal, R.J Janosik[34] finds four distinct approaches to understanding the impact of culture on negotiation. The first approach views culture as learned behaviour. It focuses on actions, without giving much attention to the reasons behind those actions. Researchers following this approach observe that

certain types of behaviour are common to certain cultures, and attempt to catalogue those behaviours. Some of the earliest investigations into cultural differences take this form. The approach tends to yield cross-cultural negotiation etiquette guides, or how-to manuals. Such general yet definite advice is often helpful to practitioners. Source: http://www.doksinet Chapter 2: Review of Literature Page 20 However, Janosik[34] notes that this approach has difficulty accounting for individual variations in negotiation styles. The second approach views culture as a matter of shared basic values. For this approach "the assumption, simply put, is that thinking precedes doing, and that one s thinking patterns derive from one s cultural context behaviours. A third approach understands cultures as shaped by the dialectic tension between paired, opposing values. American culture, for instance, can be seen as shaped by the tension between the values of collectivism and individualism, or

pragmatism and idealism, or spirituality and materialism. This approach has the advantage of being dynamic where the previous approaches were static. The fourth approach draws on a systems theory and offers multi-causal explanations of negotiating behaviour. Basic values are seen as only one cause among many Human behaviour is shaped by a complex set of factors including individual personality, cultural values, and the social context. Negotiating behaviour will vary depending upon a wide range of factors, such as the participant s age, religion, class, or character, relations of authority, institutional setting, the opponent s behaviour, and even the presence or absence of an audience. Academic analysts currently favour this approach. According to her, its complexity gives more nuanced explanations However this same complexity makes it even less useful as a predictive tool, and so as a useful guide for negotiation practitioners. Janosik[34] concludes by locating the above approaches to

understand negotiation behaviour within an even greater split in the field of negotiation theory. She cautions however that this appeal should not prevent us from undertaking studies which rely on rather more sophisticated notions of culture. Such approaches are messier but are potentially more accurate and ultimately more rewarding. An ideal negotiator has a quick mind, unlimited patience. He knows how to be modest but assertive, how to mislead without being a liar how to inspire trust without succumbing to their charms.[35] Peter A Alces & David Frisch[36] in their publication commercial codification as negotiation defines the process of negotiation as a process involving both concealing and revealing. Negotiation is a process where maximum and minimum expectations of the parties concerned have been changed gradually. There are two ways to negotiate, either soft or hard.[37] The soft negotiator wants to keep peace and readily makes concessions to avoid or resolve conflicts. The

hard Source: http://www.doksinet Chapter 2: Review of Literature Page 21 negotiator sees conflict as a battle in which the person who takes the most extreme position and holds out fares better. Gerard wrote of the type of personalities of soft and hard negotiators. These variations in the two types of negotiators are given in the table 2.3 below Table 2.3: Hard vs Soft Negotiation Soft Hard • Participants are friends • Participants are adversaries • The goal is agreement • The goal is victory • Trust others • Distrust others • Make offers • Make threats • Disclose your bottom line • Mislead as to your bottom line • Yield to pressure • Apply pressure • Try to avoid a contest of will • Try to win a contest of will Philip Kotler[38] in his book of marketing management define negotiation as a process where two or more parties try to buy/sell products or services and attempt to reach at mutually agreeable conditions. According

to Julia Tipler[39] negotiation is a journey where parties need to know both the starting point and the destination. Figure 2.2: Journey of Negotiation Paul T. Steele and Tom Beasor[40] in their practice workbook ‘Business Negotiation’ refer to the negotiation process as a process through which parties move from their initially divergent positions to a point where agreement may be reached. They further Source: http://www.doksinet Chapter 2: Review of Literature Page 22 speaks of the zone of agreement in a negotiation and presents the happenings through flow chart as below: Figure 2.3: Zone of Agreement in a Negotiation ‘Bywaters’[41] a UK based organisation was formed in 1982 specifically to assist companies achieve substantial improvement in performance through the deployment of strategies addressing four main level of change- people, process, direction and markets. They claim that actions are just as important as words when negotiating It is essential to ensure balance

between words and actions. They say that because much communication is nonverbal, it can frame a positive negotiation environment. They also advised never to enter a negotiation unless prepared to listen and make an educated decision before reacting to an excitement. Decision should be based on the objectives of the negotiation, not on the emotions. Clearly telling the other party that this is a big decision, suggest the other party to think over such a decision. When the time comes to negotiate, certain principles do apply. Mark H Mc Cormark[42] in his book ‘On Negotiating’ documents advice to potential negotiators. These are given in Table 2.4 Source: http://www.doksinet Chapter 2: Review of Literature Page 23 Table 2.4: Salient Advices to Negotiator • Advise to potential negotiator Avoid showdowns • Negotiate backwards • Trade places • Mollify then modify • Deflect with a modify • Question positions but don’t ignore them • Sweeten his

self-interest • Keep your time frame to yourself Chester L. Karrass[43], a worldwide leader in negotiation trainings states that the strength of your agreements, understandings and relationships can make the difference between success and failure. Weak agreements always break down They bring nagging dissatisfaction and aggravation into your business and personal lives. Strong agreements help you reach and exceed your own objectives, while bringing mutual satisfaction to all parties. Chester further states that whether you realize it, or not, every time you interact with people even inside your own company you are negotiating. Selling yourself and your ideas is a critical internal negotiation The more you understand about these negotiations, and are able to use them effectively, the more successful you will become. Six qualities are illustrated in the next diagram for a great negotiator. [44] Source: http://www.doksinet Chapter 2: Review of Literature Page 24 Figure 2.4: Six

qualities of Negotiators In his ‘Thoughts on Negotiation’ John F. Kennedy[45] says that only a couple of decades ago the negotiations were viewed as two sides with seemingly opposing objective and that the target was to gain as much as possible while giving as little as possible. Negotiation is a universal human activity Cohen[46] says that we all engage in negotiation at one or more level on a regular basis and good negotiation skills are needed at each and every level. Good negotiation skills are important in Business; these skills are valuable in our personal lives as well. Julia Tipler[39] in the book ‘Successful Negotiation’ states that successful negotiation is an important Communication skill and one can increase the gain and outcomes of a particular business only by mastering the negotiation. Negotiating salary in profession or negotiating for a large contract with supplier whatever the case may be, the guidelines are the same. Danny Ertel’s[47] view of deal

relationship cycle is given in the following diagrams. In the usual way, exploitation of the deal by one party creates a vicious circle of distrust and a withholding of information. Both the deal and relationship eventually suffer. A zero sum mentality eventually prevails In the better approach, negotiation does not feel compelled to trade a good relationship for a good deal. This leads to a virtuous circle of improved trust and deals satisfy the core interests of all parties. The usual and better ways approach deal relationship cycles are given below; Source: http://www.doksinet Chapter 2: Review of Literature Page 25 Figure 2.5: Deal Relationship Cycle (Usual Ways) Figure 2.6: Deal Relationship Cycle (Better Approach) Herb Cohen[46] in his book You Can Negotiate Anything says in every negotiation, there are three crucial variables: power, time, and information. You can hold the best hand at the table, but if you lack these three things, you’re still going to lose. Power is

the ability to get things done. If you can generate competition, for example, you’ll have more power during negotiations. Power also comes from perceived expertise, understanding the other person’s side, precedence, persistence, attitude, and persuasion. Source: http://www.doksinet Chapter 2: Review of Literature Page 26 Most of all, you gain power when you’re willing to take calculated risks. Time also plays a role. In negotiations, the side with the most time generally has an advantage Patience pays. No matter how pressed you are, you should always keep your cool, maintaining an appearance of calm. “Your deadline is of your own making,” Cohen writes. Don’t ignore deadlines, but don’t follow them blindly, either Information is the third crucial variable in negotiations. The more you know, the better your position Do your researches before negotiations begin and during negotiations, act on whatever new info comes to light. Cohen is especially keen on picking up

unintentional cues from the other side. Their responses, their questions, and their attitude all convey valuable information. Communication behaviors in negotiation are characterized according the strategy used during the negotiation.[48] The way in which strategies are formed and employed to reach a goal is reflected in the form of the communication. Recent research suggests that frequency, phasing, and sequencing of communications shape how settlement is reached.[49] Each approach differs in terms of how the negotiation process is characterized. The first way of characterizing negotiations is to view integrative and distributive processes as separable approaches to the task [50] . Negotiators, initiate their negotiations with the goal of maximizing joint gain use integrative tactics proportionately more frequently, whereas negotiators, initiate their negotiations with the goal of maximizing individual gain use proportionately more distributive tactics. As a result of these early

strategic choices, negotiators establish either an integrative or a distributive dynamic for the entire negotiation. A second way of characterizing the negotiation process is to view integrative and distributive strategies as interdependent components of a single strategy.[50] Most of the negotiations have both distributive and integrative elements, and that negotiators attempt to satisfy the dual goals of maximizing joint and personal gain.[51][52] The third characterization of negotiation processes is based on component of negotiation phases.[53][54][55][56] Phase models are further classified in two types of models, stage models and episodic models, according to the phases defined in the models.[55] Stage models assume that negotiations pass through a series of predictable stages on the path to agreement: issue definition, problem solving, and resolution.[56] Episodic models, in comparison, look for unified periods of coherent activity, such as an uninterrupted series of offers.

Thus, a major distinction between stage and episodic models is that Source: http://www.doksinet Chapter 2: Review of Literature Page 27 stage models treat phases as fixed, whereas episodic models treat phases as flexible, allowing variations in both their lengths and the order in which they occur. Michal and Wayne[57] defined negotiation as an exchange between people for the purpose of fulfilling their needs. It means that every negotiation is a trade Every negotiator has to give something to get something in return. This give-get exchange is the activating force behind each and every negotiation. Michal and Wayne through their book Negotiation-Art of getting what you want try to express how to negotiate in such a way as to gain the most advantageous give-get exchange. They refer to the variable in the negotiation process and these variables are presented in the following illustration: Figure 2.7: Negotiation Process Negotiation is solution of the situation where two or more

parties reach a position and their interests or values come in conflict with one another.[58] There are several ways in which to resolve the conflict. In the case of conflict if one party is significantly more powerful, they could attempt to simply enforce their opinion on the other. Otherwise both parties may choose option to involve an outside neutral party to “mediate” the issue. Generally, the mediator’s role is that of a facilitator, bringing the parties together and assisting them to work through the particular issue. Another tool for conflict resolution involves the use of an “arbitrator.” There are generally two types of arbitration; binding and non-binding. In both cases the arbitrator hears the positions of both parties and then renders a decision. In binding arbitration, both parties are “bound” to the decision. Under the non-binding case, either party is free to disregard the arbitrator’s decision. According to him the collaborative style, also referred to

as problem-solving, integrative bargaining, or creating value, attempts to Source: http://www.doksinet Chapter 2: Review of Literature Page 28 reach agreement through creating options that are conducive to achieving or maximizing the goals of both parties thus creating a “win-win” situation. Graphical representation of the negotiation continuum given by Horst is shown in Figure 2.8 Figure 2.8: Negotiation Continuum Rubin describes five attributes linked to successful negotiators. First, effective negotiators have the capacity to be flexible on the method to achieve their goals. They establish their goals early on with an idea as to the general nature of the outcome but remain flexible on the means for achieving these goals. Second, negotiators remain sensitive to “social cues” (interpersonal sensitivity) given off by their counterparts without being over-reactive to these observations. To ignore the cues may be to miss out on important pieces of data. Conversely, to react

too strongly risks misinterpreting intentions based on personal bias. The third attribute is the negotiator’s “inventiveness” or ability to develop creative solutions in order to strive for mutually acceptable agreement. Patience is the successful negotiator’s fourth attribute Rubin attaches this trait to the negotiator’s ability to look beyond immediate gains with a view on the long game. Finally, successful negotiators are tenacious especially in the area of reconfiguring an “adversarial relationship into a more collaborative arrangement”. Phases in the process of negotiation as per the “frames of reference” are given below in the Figure 2.9 Source: http://www.doksinet Chapter 2: Review of Literature Page 29 Figure 2.9: Phases in the Process of Negotiation Horst concludes that negotiation is an important and valuable tool for resolving conflict when all parties involved have a shared commitment to reaching a collaborative, joint outcome that satisfies both

parties’ needs and interests. Tomasz Wachowicz & Shikui Wu[59] in his paper “Negotiators’ Strategies and their Concessions” analyze the problem of strategy formulation and concession making by negotiators that took part in the Global Research on Inspire Negotiations (GRIN ) research project . Within this project 254 negotiators from Austria, Canada, Poland and United States conducted bilateral business negotiation via the Inspire negotiation support system.[9] According to them they negotiated a multi-issue problem including: price, payment, delivery and returns; for which an additive scoring system was proposed to evaluate the offers by means of a single aggregated criterion (utility).[60] Having completed the negotiation process, each negotiator was asked to prepare a written report describing her/his negotiation behavior, strategies and goals and giving insights into their subjective evaluation of the negotiation process and system. In this study negotiators were

clustered into four classes of similarity using R’s clustering analysis procedure, which allowed to identify within the set of GRIN negotiators, the following four groups: Source: http://www.doksinet Chapter 2: Review of Literature Page 30 • 3VL – very little cooperativeness, • 3H – highly cooperative, • LC2I – little cooperativeness, but with intermediate level of in formativeness and persuasiveness, • IC2L – intermediately cooperative and a little informative and persuasive. They referred to the five modes of conflict solving that position negotiators profile within the two dimensional space of assertiveness and cooperativeness. Figure 2.10: Five Modes of Conflict Solving They concludes that operating with scoring systems requires from negotiators an adequate mathematical preparation and basic knowledge of the effects it can cause on the interpretation of scores. 2.2 e-NEGOTIATION e-Negotiation improves the efficiency of settlements. It has the

capability of suggest the solutions within the seconds. Using e-negotiation negotiating parties can quantify their preferences. e-Negotiation decreases the negotiation time and cost as compared to traditional negotiation tactics. Parties involved in the negotiation are distant from each other, an e-negotiation system can bridge this distance and provide the negotiation with a task-related framework to communicate efficiently. Research and design related to electronic negotiation came from academia, primarily from three areas: management science, information systems and computer science.[61] Source: http://www.doksinet Chapter 2: Review of Literature Page 31 These three research areas contributed to the development of five types of systems; all are illustrated in Figure 2.11 below: Figure 2.11: e-negotiation systems The first stage of the process is theoretical and applied research. In this stage behavioral studies are conducted that verify theories and their components and

implementation. Implementation of verified theories increasingly takes more time in research because of the necessity to use software and other systems in theory verification and modification. Domain engineering is the second stage, which is software engineering. This stage is further classified into two subsequent phases are requirement analysis and software design as given in figure 2.12 Figure 2.12: Stages of e-Negotiation System Development Domain engineering provides the link between theoretical research and experimentation and implements software engineering from the theoretical models and experiments. Domain engineering may be viewed as both engineering and a part of applied research. Kersten & Lai[61] aggregate a higher-level constructs of the phases included in electronic negotiation for the description, analysis and design of Source: http://www.doksinet Chapter 2: Review of Literature Page 32 the system. The first-level constructs that are associated with

the phases are given in the Figure 2.13 as follows: Figure 2.13: Phases in Electronic Negotiation Above negotiation constructs can be used to describe the negotiation and its structure. Kersten & Lai[61] also help in specifying the permissible negotiators’ behaviors and conditions for their movement through the process; such a description is known as a negotiator protocol.[62] Muller[63] suggests three categories of negotiation as shown in the figure 2.14, which are useful in the discussion of protocols Figure 2.14: Categories of Negotiation Source: http://www.doksinet Chapter 2: Review of Literature Page 33 Development, exploration and use of ICTs are geared by the internet. Use of internet changes the ways systems are developed, implemented and used. Kersten & Lai propose to make a distinction between the two generations of negotiation systems and related research and training: (1) NSSs designed for a stand-alone computer or a local area-network and (2) ENSs systems

which use internet technologies and are deployed on the web. These two broad categories are discussed from three following perspectives: (1) real-life applications, (2) systems used in business, research and training, and (3) research results. The development and applications of ENS are driven by new internet technologies and the expanding access to data across the web, use of multimedia, use of software services available on the web, new business models, and so on. Continuously growing e-business, increasing importance of transactions conducted on the e-marketplaces, exchange mechanisms and the related research should be explored from the intrinsic change of both social and technical aspects and the interactive impact between them. Michael Strobel[62] examined in his paper titled “Communication Design for Electronic Negotiations on the Basis of XML Schema” the representation of negotiations in electronic markets and their support is important issues in today’s ecommerce

research. However, an explicit negotiation design can also address how can one ensure that the negotiating parties have the same understanding regarding the issues that are subject to the negotiation? The solution this paper proposes is to perform a communication design for electronic negotiations that explicitly specifies the common syntax and semantics of the negotiating parties, the logical space of the electronic negotiation. Furthermore, XML Schema is suggested as the mechanism for the runtime representation of the logical space and the validation of actual negotiations from a Source: http://www.doksinet Chapter 2: Review of Literature Page 34 syntactical and semantical perspective. On the basis of this approach, organisations creating an electronic market or sellers who intend to offer their buyers the ability to bargain can design and generate support mechanisms for electronic negotiations in a flexible and efficient way. A magnitude of technologies can be used to build

electronic negotiation media. These technologies are core elements of development efforts that have historically come to be known as negotiation support systems. Figure 2.15: Negotiation Support Systems Margaret J. Kersten, Marlene Haley and Gregory E Kersten[64] conducted a research study titled “Developing Analytic, Cognitive and Linguistic Skills with an Electronic Negotiation System” to discuss the adoption and diffusion of Inspire for teaching different types of courses, including English for Academic Purposes, English for Specific Purposes (Engineering and MBA) and English Writing for Academic Purposes. Inspire provides a platform and tools for negotiators to work together to resolve their differences. The preparation for the negotiation and the conduct of the negotiation in an asynchronous mode are designed to give the users control over the process and the outcome of their negotiations. Exchange of offers, counteroffers and messages creates a framework for a meaningful

interaction, where results depend on the user’s decisions and their ability to communicate effectively. Going through different phases of the negotiation, the students develop analytic, cognitive and linguistic skills better than others. Source: http://www.doksinet Chapter 2: Review of Literature Page 35 Hasan Al-Sakran and Irina Serguievskaia[65] in their article “A Framework for Developing Experience Based e-Negotiation System” propose multi-agent distributed electronic negotiation system, where the learning process is facilitated by using the Case Based Reasoning (CBR) approach in combination with case database and addition of ability to roam through a network allows considering outside options using mobile agent technology. CBR is an AI methodology which combines re-use of the past experiences with case base. Cases similar to the current case at hand are retrieved from case base, revised and used to develop new offers and counter-offers. Practical e-negotiation system

should not be built on the centralized decision making approach. In this work the possibility of combination of centralized and decentralized decision making is explored. By nature, there are usually previous negotiation cases. A lot of negotiations are conducted repeatedly on the same or similar resources with similar issues, so identical tasks are performed over and over again. In general, a negotiation agent knows its principal’s preferences, but not the preferences of the opponent. It has to be able to make reasonable decision based on incomplete information. One possible solution is to use Case-Based Reasoning (CBR) approach, which allows an agent to learn from previous experiences. Figure 2.16: Case-Based Reasoning (CBR) Approach The overall framework of the proposed negotiation system is presented in the figure 2.17 below Proposed negotiation system consists of a number of agents Each agent is associated with a specific functional unit. The whole system requires three

different Source: http://www.doksinet Chapter 2: Review of Literature Page 36 agent types, one mobile that is negotiator agent and two static agents: interface agent and task agent. Figure 2.17: Negotiation System Application of cased-based reasoning in development of an effective e-negotiation system can be applied to a wide range of negotiation situations. Modular approach of the proposed system allows for development of a domain independent e-negotiation system. By generalization of negotiation strategies a system that can manage both the offers/counter-offers and the information may be developed. Gregory E. Kersten, Jamshid Etezadi, Eva Chen and Rudolf Vetschera[66] in their study “User Assessment of E-negotiation Systems” formulate an assessment Model for Internet Based System (AMIS). Proposed model was used to determine factors important in high user acceptance of the technology. This paper presents a follow up study that uses structured equation modeling to verify AMIS

and its empirical results. The focus is on the examination of the user’s assessment of the system and their intention to use it, while taking into consideration its key features. In addition, the impact of gender is tested on the model to relate important differences in perceptions. Source: http://www.doksinet Chapter 2: Review of Literature Page 37 Figure 2.18: Assessment Model for Internet Based System (AMIS) The AMIS model postulates that the construct results impacts constructs usefulness of analytical tools and usefulness of communication. The exploratory results of the AMIS model show that there is a significant correlation between the construct results and usefulness of analytical tools, ease of use of analytical tools and ease of use of system. Gregory E. Kersten, Eva Chen, Jesus Rios and Stefan Strecker[67] conducted their study “A Study on Preference Impartation and Decision Support in E negotiation” to determine that the effectiveness of methodological support

depends on the numerical preference values. According to the study preference information is transmitted in qualitative terms to the negotiation agents, analytical support may be counterproductive. Different aspects of decision making and negotiation may be supported with analytical and communication tools. In this study the analytical support is limited to preference elicitation, utility construction, and calculation of the utility value for every offer exchanged. The communication support is limited to the exchange of structured offers, free text messages, and maintenance of the negotiation transcript and graph showing the offer exchange process. The research model has two independent variables: analytical support for the negotiation dyad and the preference information mode. Source: http://www.doksinet Chapter 2: Review of Literature Page 38 Figure 2.19: Offer Exchange Process of Negotiation The experiment involved a contract negotiation between an artist and an

entertainment company. One negotiator was the artist’ s agent and the second negotiator represented the company. They concluded when analytical support was not provided, there were no significant differences in the dyads’ performance between preferences described quantitatively and only qualitatively. Thus, the inclusion of numerical information to explain the principals’ interests for non analytically supported dyads seems to have no impact on the negotiation outcome. ShiKui Wu and Rustam Vahidov[68] describe how the user perceptions of ENS features influence the assessment of ENS. As ENSs are a type of information systems (IS), it would be appropriate to begin with the well-known theoretical models related to user perceptions of IS. The two widely cited models in this respect include the technology acceptance model[19] and the IS success model[69]. The first one focuses on user perceptions of system, while the second one measures user satisfaction. More recently a model

combining the two above-mentioned ones has been proposed.[70] However, these models do not incorporate specific system features explicitly. In regards to ENS assessment the important feature categories include communication support (messaging), analytical support (preference modeling), and graphical support (offer history). Authors looks to evaluate the influence of the ENS user perceptions of these features on important constructs used in theoretical IS models. Proposed research model includes the following independent variables related to system feature perceptions: Source: http://www.doksinet Chapter 2: Review of Literature • Perception of messaging function (PMF) • Perception of offer-history tables (POH) • Perception of offer graph representations (POG) • Perception of offer ratings (POR ) Page 39 Dr. Ernest Thiessen - Inventor of a patented E-Negotiation system called Smartsettle[10], that has been designed to tackle complex water resource negotiations.

Smartsettle has been endorsed by world-renowned experts, was a topic of a United Nations keynote speech, and is seeking involvement in the Nile Basin Initiative. Now Smartsettle has developed a product suite well suited to pilot testing, tracking and optimizing for a multitude of potential market applications Figure 2.20: Applications of Smertsettle Smartsettle is applicable to virtually any negotiation between two or more decision makers. The potential applications are endless Research and development began in 1993 when the company was incorporated. Samartsettle provides services in two variants: Source: http://www.doksinet Chapter 2: Review of Literature Page 40 Figure 2.21: Services provided by Smartsettle Figure 2.22: Smartsettle Infinity INSPIRE[9] is a Web-based negotiation support system. It allows for the specification of preferences, assessment of offers, management of communication, graphical display of the negotiation s progress, post-agreement analysis, and other

functions. The system is flexible and can be used as a game, a demonstration decision support Source: http://www.doksinet Chapter 2: Review of Literature Page 41 system (DSS), a negotiation simulator, a demonstration negotiation support system (NSS), and a research and training tool. INSPIRE is developed for research and training and using Inspire requires following a sound approach to negotiation that has been proposed by experts, has been used by over 8,000 users, and is the cornerstone of negotiation analysis. There are three basic phases of a negotiation: preparation, conduct of negotiation, and post-settlement. Participants in the negotiation are paired randomly and anonymously. Your partner may be from your city, country or from far away: a different country, a different continent. A user has to Login to the INSPIRE using user-name and password provided through Inspire confirmation email that have been received after the registration. Main steps that negotiator will follow

during the process of negotiation are shown on the welcome screen. Status of negotiation might be checked at any time during the process of negotiation. Public Information is available to both parties whereas private Information is only available to the party currently logged in but not to the counterpart. 100 points are distributed among the various issues The most important issue gets the highest number of points; the least important issue gets the least number of points. The points for all the issues must total 100 A use has to rate the options for each issue by distributing the assigned number of points among all the options of each issue. Maximum number of points is given to the best option as per the negotiator’ s thinking and zero to the one which is the worst for negotiator. A number of packages are displayed for negotiator. Each package has a rating Every offer (a package) which negotiator wants to consider and present to the opponent will show a rating based on the

preferences of negotiator. Negotiator can also send messages to your counterpart using the message-box. At any point negotiator may review the history of your negotiations. When both the parties accept an offer, it is called an "agreement" Inspire will tell you whether the agreement is "optimal", or whether it is possible to improve it and move towards a better agreement through the post-settlement phase. Source: http://www.doksinet Chapter 2: Review of Literature Page 42 2.3 NEGOTIATION SUPPORT SYSTEM Negotiation Support Systems (NSS) are dedicated decision support system that is designed to assist negotiators in reaching mutually satisfactory decisions by providing a means of communication and through the analysis of available information. Whereas in the case of e-negotiation, negotiations can be performed through email or other general electronic technologies, but there is an absence of dedicated negotiation system that can only be used in negotiation

process. According to the website ‘dssresources.com’ [71] Negotiation Support Systems (NSS) are designed to help the negotiators in decisions which are agreeable to each party by providing a means of communication and through the analysis of available information. Negotiation support may involve using a model-driven, data-driven, communications-driven, document-driven or a knowledge-driven DSS. This subcategory of computerized decision support systems is defined by the purpose of the system. Kersten and Lo[8] describe Negotiation Support Systems as "designed to help and advise negotiators; they are used to structure and analyse the problem, elicit preferences and use them to construct a utility function, determine feasible and efficient alternatives, visualise different aspects of the problem and the process, and facilitate communication." Negotiation Support Systems are classified as process-oriented NSS, which focuses on improving the negotiation process, and others are

result-oriented NSS which provide tools for improve the results of the negotiation. The result-oriented NSS have tools to help decide upon offers and to help evaluate the offers received. Resultoriented Negotiation Support Systems may be standalone systems used by the bargainer or negotiator, bilateral systems used by both parties, or multilateral, used by many parties to the negotiation. In general, there are general purpose and special purpose NSS. Kersten noted "Negotiation support systems (NSS) cover a wide range of individual and group decision support technologies. Many NSS have been developed and used in training and research but they have been rarely used in practice." Source: http://www.doksinet Chapter 2: Review of Literature Page 43 The use of information technology in negotiation support is required to achieve eight goals. These goals include: enabling asynchronous negotiations, presenting advice, providing checklists, reducing transaction costs, force to a

bargaining positions, arranging offers, administer negotiation data, and providing a negotiation process or protocol. To meet all of these goals it is necessary to create multiple subsystems in a Negotiation Support System. Arnott and Pervan[72] suggests two approaches to constructing negotiation support systems. These two approaches are problem oriented and process oriented Problemoriented NSS products include Co-oP, DECISION MAKER, GDSI and MEDIATOR These problem-oriented systems focus on providing support to support negotiation for specific problem types. On the other hand, process-oriented NSS focus on providing general support of the give-and-take process of negotiation. Negotiation Support Systems is not a new subfield related to decision support. There has been a Negotiation Support Systems minitrack at the Hawaii International Conference on System Sciences (HICSS) since 1991. Yufei Yuan, Joseph B. Rose, Norm Archer and Suarga[73] has introduced a Web-based Negotiation Support

System CBSS. The system facilitates a structured on-line negotiation process. It is written in JAVA language and can be accessed easily through the Web. The system has been tested in comparison with face-to-face meetings in simulated labour union-management negotiations. The test shows that CBSS was viewed as a valid alternative to face-to-face negotiation, although bargaining processes supported by CBSS were perceived to be slower than face-toface negotiation. According to the authors main objectives of CBSS are the following: • Easy access through the Web. Two parties anywhere in the world should be able to negotiate by accessing CBSS through the Web. • Real-time communication and interaction. Negotiators should be able to communicate with each other in real-time and interact in a variety of ways such as hot-line co-ordination, common documents. message exchange, and working on Source: http://www.doksinet Chapter 2: Review of Literature • Page 44 Structured

negotiation process. Negotiation should be organised in a wellstructured process including preparation, setting agenda, issue discussion, and making the final agreement. • Automatic documentation. The entire negotiation is automatically documented. Negotiators should be able to review any issues that have been discussed and any agreements that have been reached. • Security and privacy. The system should be able to recover from system or communication failure. Each party should have its private and shared documents. All information that has been exchanged cannot be altered by either party. Frank Kohne, Mareike Schoop, and Dirk Staskiewicz[74] explored in his research titled “ An Empirical Investigation of the Acceptance of Electronic Negotiation Support System Features” that the role of advanced communication supports in user’ s experiences. Through this paper authors try to inform the discussion of technology acceptance regarding decision support systems.

Regarding complex negotiation cases and the application of NSSs we have the following hypotheses: • In line with TAM/UTAUT, overall performance and effort expectancy will significantly influence the users’ intentions of using NSSs. • On a more detailed level, the users evaluate communication support and analytical support offered by an NSS separately. These two have to be tested before further inferences can be made. They are the preconditions for the third hypothesis to follow. If either the TAM is not reasonably predicting usage intentions in our sample or if users have a holistic perception and evaluation regarding the different types of support features, testing specific features’ contribution to the prediction would not be meaningful. If the hypotheses hold, the third hypothesis can be tested: • The perception of the usefulness of communication support features in NSSs will significantly determine users’ overall performance expectancy and thereby their intentions

of using NSSs. Source: http://www.doksinet Chapter 2: Review of Literature Page 45 Figure 2.23 summarises this idea All other elements of the original model (ie age, experience etc.) are disregarded here, because there is hardly any variance in the present context due to the controlled experimental environment. Figure 2.23: Technology Acceptance Regarding NSS Alina Pommeranz, Willem-Paul Brinkman, Pascal Wiggers, Joost Broekens, and Catholijn M. Jonker[75] described a scenario-based approach to gathering requirements for such a system. They wrote five scenarios containing part of the envisioned functionality in the most important use situations, e.g face-to-face negotiation, on the phone, collaborative or mobile preparation. They used claims analysis to clarify the design decisions. Authors constructed 12 design guidelines for NSS Overall these guidelines boil down to the following overall insight: the preparation phase of a negotiation and the actual negotiation with an opponent

require different interaction styles. The major implication of these guidelines is that NSS need to have intelligence and reasoning capabilities in order to process the information entered by the users and give personalized output. Participants were able to directly reflect upon the potential usage of the NSS. Joost Broekens, Catholijn M. Jonker and John-Jules Ch Meyer[76] in their paper titled “ Affective Negotiation Support Systems” , first argue that affect is an important issue to consider when developing a negotiation support system. They do so by giving a strategic overview of some of the most important findings in the affect-cognition and affect-negotiation literature. Second, they show in a structured manner during which phases in the negotiation process what emotion-related concepts play a major role, as well as discuss more concrete affect-related support functions an affective negotiation Source: http://www.doksinet Chapter 2: Review of Literature Page 46 support

system could offer. Third, they analyze the feasibility of these functions by reviewing currently available affective computing technologies, such as affect measurement, emotion modeling, emotion expression, emotional reasoning, and emotional agents. 2.4 SOFTWARE AGENTS Software agents are programs that carrying out computing tasks on behalf of the user instead of a physical entity. Software agents are belongs to the concept of robots within the Artificial Intelligence (AI) community. Agents can only do the requests if they “ know” something about the context of the request. “ In fact, the concept of “ agent” embodied in humans helping humans is often one where expertise is indeed mixed with knowledge of you. A good travel agent blends knowledge about hotels and restaurants with knowledge about you A real estate agent builds a model of you from a succession of houses that fit your taste with varying degrees of success. Now imagine a telephone-answering agent, a news agent, or

an electronic-mail-managing agent. What they all have in common is the ability to model you.” [77] Software Agent a software entity which functions continuously and autonomously in a particular environment, often inhabited by other agents and processes.[78] “ An agent is anything that can be viewed as perceiving its environment through sensors and acting on that environment through effectors.” [79] “ Autonomous agents are computational systems that inhabit some complex dynamic environment, sense and act autonomously in this environment, and by doing so realize a set of goals or tasks for which they are designed.” [80] “ An intelligent agent is software that assists people and acts on their behalf. Intelligent agents work by allowing people to delegate work that they could have done to the agent software. Agents can, just as assistants can, automate repetitive tasks, remember things you forgot, intelligently summarize complex data, learn from you, and even make

recommendations to you.” [81] Source: http://www.doksinet Chapter 2: Review of Literature Page 47 “ [An agent is] a piece of software that performs a given task using information gleaned from its environment to act in a suitable manner so as to complete the task successfully. The software should be able to adapt itself based on changes occurring in its environment, so that a change in circumstances will still yield the intended result.” [82] Software agents can’ t be defined with a single definition because of the abstract nature and the incorporated potential functionality of software agents.[83][84][85] A software agent is a program which is different from a standard subroutine or software application due to the characteristics of software agents. Most of the software agents have several common key characteristics that offer minimal requirements for software to be classified as agent-like. These characteristics are autonomy, reactivity, persistence and

goal-orientedness. Other characteristics such as mobility, interactivity and intelligence are also frequently associated with software agents. Autonomy is a characteristic that appears to be fundamental to most definitions of software agents. A software agent senses its environment and acts autonomously upon it. The interpretations of autonomy with regard to software agents vary slightly among agent researchers. A software agent can initiate communication, monitor events, and perform tasks without the direct intervention of humans or others. An agent be able to “ pursue an agenda independently from its user” and take “ preemptive or independent actions that will eventually benefit the user” .[83] Using the less restrictive definition, a software agent could be a program executed initially by the user which would then carry out its purpose independently.[84] Reactivity is another key characteristic of agent behavior. Reactivity has been defined as an agent’ s ability to

perceive the environment and respond to changes in that environment in a timely fashion.[86] A software agent responds in a timely fashion to changes in its environment. This characteristic is crucial for delegation and automation. The general principle on which software agents operate is “ When X happens, do Y,” where X is some system or network event that the agent continually monitors.[81] In reacting to the environment, the agent extends its autonomy by Source: http://www.doksinet Chapter 2: Review of Literature Page 48 carrying out actions in response to context changes, without intervention from the user.[84] Continuity is key characteristic, which qualifies a software program to work as an agent-like. The idea is that once a task or goal has been delegated, it is up to the agent to work tirelessly in pursuit of that goal. Software agents must run or execute continuously and are frequently referred to as continuously perceiving their environment. The length of time for

which a software agent may persist varies depending upon the task that the agent was assigned to carry out. This feature is often implemented by providing the agent with its own thread of execution and using a loop to keeps the agent running. Agents are goal-oriented they “ realize a set of goals or tasks for which they were designed” [80]. An agent can accept high-level requests specifying the goals of a human user (or another agent) and decide how and where to satisfy the requests. Their reactivity must be tempered such that agents are not continuously running programs that simply react to changes in the environment. Agents should be single-minded and proactive in carrying out their assigned task. In some cases, an agent can modify the goals or establish goals of their own.[86] The concept of goal-orientedness is further refined by Covrigaru and Lindsay[87] in their article Deterministic autonomous systems. They classify goal of software agents in two types of goals, homeostatic

and achievable goals. Homeostatic goals are continuously pursued whereas achievable goals are not continuously pursued; the achievement of the final state marks the termination of the goal.[87] Agent mobility is achieved by transmitting the agent to a remote location. A mobile agent is a software agent program that is transmitted, as a whole, to a remote location where it executes. The entire program is transmitted to the remote server, including its “ code, data, execution state, and travel itinerary” [88]. Mobile agents can be transmitted to multiple remote servers by using a schedule of tasks or by being transmitted to another server by an agent server. If remote servers are unavailable agents can wait at server until the server is accessible and complete their tasks using continuity characteristics. Source: http://www.doksinet Chapter 2: Review of Literature Page 49 Support and security issues are considerably explored in the environment of mobile agents. Security issues

that must be covered at the time of development of an agent system including the authorization that which agents should be given access to the server and which files should be made accessible to these agents. Mobile agents can facilitate the exchange of data and processes among different applications and inherently provide distributed processing due to their ability to execute on remote sites. In an agent-enabled network, each node can serve and support agents, providing peer-to-peer functionality. Client stations can host mobile agent executions reducing network traffic and server overload. Agent communication is the ability of the agent to communicate with the other agents or with human beings.[84] Efficiency of an agent can be improved through cooperation and delegation, if they can exchange information with other agents. Agents have been created in various programming languages but most of the agents were developed in Java. A common programming environment is required for the

development of agents to overcome the integration and compatibility related problems. An agent communication language (ACL) has been developed by the Knowledge Sharing Effort, a joint initiative of several research groups, to provide a means for communication among agents developed in different programming environments for different purposes or domains.[89] ACL creates a common semantic base and prevents the use of synonyms to describe similar facts through its three components, a “ vocabulary, an inner language called Knowledge Interchange Format (KIF) and an outer language called the Knowledge Query and Manipulation Language (KQML)” .[90] IBM describes intelligence of agents as the “ degree of reasoning and learned behavior: the agent’ s ability to accept the user’ s statement of goals and carry out the task delegated to it.” [91] Imam and Kodratoff describe an intelligent agent as a “ system or machine that utilizes inferential or complex computational methodologies to

perform the set of tasks of interest to the user.” [92] Intelligence is an enabling feature that allows an agent to pursue its goals more efficiently with less assistance from the user or designer. One of the most common examples of learning agents is the wizards found in many commercial software programs (e.g, in Microsoft Office applications) Learning Source: http://www.doksinet Chapter 2: Review of Literature Page 50 agent watches user’ s actions just from its initialization and add user’ s habits and preferences to its knowledge base in the form of rules to reflect the individual preferences of the user.[80] A learning agent can independently carry out tasks for the user With this form of intelligence, a well-trained agent can independently carry out tasks for the user and react to its environment appropriately. Lashkari, Metral, and Maes[93] created an agent that is able to assist the user with the filtering and filing of e-mail by allowing the agent to learn from other

agents. The agent may need to watch the user’ s actions in dealing with over 100 e-mail messages before it is reasonably confident in its recommendations to the user. By interacting with another user’ s previously trained e-mail agent, the required training time for the new agent can be reduced. In Maes’ study, a trained agent shared information with regard to how its user dealt with e-mail from a specific source. The newer agent was able to use this knowledge when its user received e-mail from the same type of source and was able to reach a reasonable confidence level almost immediately. A user can assign a task to an agent and need not to monitor how or whether the agent will accomplish the task. The reactive and continuity nature of the agent should ensure that it completes its goals and updates the status to its user or other program as the case may be. The use of agents as a user interface abstraction can provide an alternative means of desktop manipulation. Limitations of

the direct manipulation interface include scalability and level of expertise. As the volume of information at our fingertips increases, the hierarchy of files and links on our desktops becomes too deep to negotiate efficiently. Less experienced computer users often have a difficult time navigating through feature-rich interfaces. Agents are useful within the user interface environment because they can react to the actions of the user, providing assistance in response to various events. Intelligent agents can learn the preferences of the user, and thus can provide a personalized interface to each user. The functional decomposition that occurs in delegating tasks to agents results in software modules that are responsible for specific tasks. This modularity makes it easier to locate logic errors and extend applications. While users appreciate the benefits of interface and interoperability abstraction, software developers appreciate the reusability and modularity inherent in agent-based

software design. Source: http://www.doksinet Chapter 2: Review of Literature Page 51 2.5 CONCLUSIONS OF LITERATURE REVIEW On the basis of exhaustive literature review presented here, salient conclusions have been drawn; 1. One area of the research has relatively unexplored yet, this unexplored research area is pertain to the identification of factors that affect the adoption of e-negotiation through software agent. 2. Adoption of new technology is also an important area to research as it provides valuable information to researchers for developing relatively better enegotiation systems. 3. In order to explain the adoption of electronic negotiation through software agent, researchers need to determine the factors that would affect the adoption of electronic negotiation and after the determination of such factors researchers need to develop a model related to the unique context of electronic negotiation. 4. Most of the research works in the electronic negotiation and negotiation

support system have been focused on the design and development of electronic negotiation systems, negotiation and culture, decision support in negotiation and on commercially available negotiation systems. 5. Another contextual difference is that most of the past studies have focused on special purpose negotiation systems, i.e that the developed systems are worked for a specific type of negotiation problems, for example some systems are worked only for insurance claims and some for real estate, mergers and acquisition etc. The salient conclusions drawn here will be the basis of the present research as given below; 1. The area of electronic negotiation through software agents is still in its infant stage and commercially unavailable. Therefore, the electronic negotiation model that is developed in the present study will take this context into account, i.e the concept will be very new and thus such things as pre-formed opinions or views etc. will not exist for such a technology Source:

http://www.doksinet Chapter 2: Review of Literature Page 52 2. The present study will focus on adoption of electronic negotiation through software agent is not bound to a specific case of negotiation. Determined factors that affect the adoption of electronic negotiation are same for every case of negotiation and similar for most of the product domains. Also there has not been any organizational level recognition is needed to use electronic negotiation through software agent because of its infant stage in the development. 3. Through this study, researchers will contribute to the electronic negotiation literature by determining the factors that would affect the adoption of e-negotiation. By studying these factors, it is hoped that valuable contribution will be extended to researchers for developing electronic negotiation systems that can improve enegotiation technologies. Contribution to the technology acceptance literature through this study is introduction of electronic negotiation

model that explains the adoption of a relatively new technology. Relatively new technologies differ from mature ones in sense that they typically are not commercially available and that they lack any requirement of mandatory usage. Further, an electronic negotiation model that explains adoption of e-negotiation through software agent, which is an entirely new context versus the framework of techniques assessed in the past studies. This work is also important for future studies on adoption of other new technologies, which are under development and can be used as theoretical framework for such studies