Automation in Construction 99 (2019) 39–51

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Automation in Construction
journal homepage: www.elsevier.com/locate/autcon

Negotiation throughout flexible and interactive tradeoffs applied to T

construction procurement
⁎
Rachel Perez Palha
Universidade Federal de Pernambuco, Brazil

A R T I C LE I N FO A B S T R A C T

Keywords: A model for e-negotiation in a typical procurement process in the construction industry is presented. The greatest
Construction procurement contribution of this paper is a novel model for e-negotiation using an adaptation of the FITradeoff method for
Negotiation group decision and negotiation with an unbiased mediator agent so as to reduce the number of interactions
GDN needed to reach an agreement. The elicitation process included within the negotiation model sees to it that the
Mediation
cognitive effort that the negotiators need to make is reduced because partial information and strict preference
FITradeoff
BATNA
statements can be used. The mediator agent facilitates the negotiation phase, thereby allowing a general con-
Expanding the pie tractor to compare subcontractors and to decide if there should be a 1–1 or 1-N negotiation process. Moreover,
this agent conducts the negotiation process and presents the best and suboptimal agreements to the negotiators.
A prototype was built to test the model using data from a real construction project.

1. Introduction
The success of any construction project depends on selecting the
right contractor to conduct the project and on meeting the clients' re-
quirements [1]. Irrespective of the contractor's skills, in most large
projects, some activities will be subcontracted to firms that provide
specialized services [2]. A typical procurement process involves the
main contractor evaluating the demand and determining the procure-
ment packages; prequalifying subcontractors; sending requests for
quotations to the prequalified prospective subcontractors; and evalu-
ating quotations and negotiating with the suppliers [3]. The contractor
on receiving these quotations or bids evaluates to what extent bids
reflect a compromise between cost and all the aspects of the construc-
tion project that need to be taken into account [4] and after having
done so, it is common for there to be a negotiation process during which
agreement on contractual terms is sought [5]. However, negotiations
are a time-consuming because all parties involved wish to maximize
their payoff [6], which often leads to suboptimal agreements [7,8]. The
main problem for contractors during the negotiation phase of pro-
curement is that they have limited information on values and strategies
that might be appealing to the opposite site. They need the support of a
negotiation system to reduce their dependence on personal experience,
to improve the quality of the negotiation and to shorten its length [5].
Negotiation processes are characterized by interactions among two
or more actors, who have different objectives towards this iteration and
who may or may not reach a decision [8]. In the last three decades,
several Negotiation Support Systems (NSS) and E-Negotiation Systems
(ENS) have been proposed. When these NSS are web-based, the nego-
tiation process is called e-negotiation and the tool is called an e-nego-
tiation system (ENS). Negoplan [9] is a NSS and does not simulate the
process of negotiation completely, because it focuses on supporting one
of the negotiators, whose preferences are known, whereas there is no
information about the other party. Therefore, the only input on oppo-
nent's information is made when he/she presents counter-offers and
these are used to increase the knowledge of the supported negotiator to
improve his/her results. Inspire [10] is the first web-based NSS and it
was created to provide training and to study the impact of commu-
nication technologies between cultures on the process of negotiation, as
well as to provide a direction to future web-based platforms that will
deal with negotiation. Negoisst [11] is a system built for business-to-
business negotiations in e-commerce, based on theories of commu-
nications to help negotiators to communicate in a structured way and it
only provides information of the deal at the end of the process. WebNS
[12] focuses on the automatic processing of documentation while ne-
gotiators exchange messages. It also supports the discussion of issues
and helps negotiators by providing a separate window in which they
can visualize the issues already agreed. The Interactive Computer-As-
sisted Negotiation Support system (ICANS) is a system that uses deci-
sion analytic techniques to facilitate and support the negotiation pro-
cess, where, after each offer/counter-offer, the system calculates all

⁎
Av. Acadêmico Hélio Ramos, s/n – Cidade Universitária, Recife, PE CEP 50.740-530, Brazil.
E-mail address: rachelpalha@gmail.com.

https://doi.org/10.1016/j.autcon.2018.12.002
Received 15 May 2018; Received in revised form 29 October 2018; Accepted 4 December 2018
Available online 11 December 2018
0926-5805/ © 2018 Elsevier B.V. All rights reserved.
R.P. Palha
feasible alternatives that are not worse than this proposal. ICANS can be
used by negotiators or by a mediator [13]. This Web-based Negotiation
Support System (WNSS) evolved to the commercial platform Smart-
Settle [14].
These systems can help to resolve conflicts, facilitate communica-
tion between the parties [11,12], store and access bargaining in-
formation [10,14], as well as help the parties to come to an agreement
by offering potential compromises and proposing concessions [15].
Even though several platforms have been put forward, they were
mainly built for educational purposes. Examples include the C-Nego-
tiation Game [3], Inspire [10], Negoisst [11] and WebNS [12]. There-
fore, only a few of them became websites that are commercially
available to customers, and one explanation for this is that negotiations
require a large amount of cognitive effort from the negotiators, espe-
cially when they have to tackle many issues [16]. To the best of the
author's knowledge, the platforms for negotiation built for the con-
struction industry mainly focus on disputes and conflicts [15,17], some
of which are used to enable remote partnering in the industry using the
Project Planning Process Model [18] or to enhance supplier manage-
ment by using a multiagent system to coordinate suppliers and sub-
contractors [19]. What they do not do is to focus on the negotiation
phase that occurs during construction procurement.
As mentioned above, the purposes of existing NSSs are different.
However, they were not created with a view to helping decision makers
(DMs) to state their preferences between alternatives. Lai and Sycara
[20] pointed out that DMs have a major difficulty with stating their
preferences. Therefore, using a tool to aid them during this process is of
major importance. The technique for offering this help is called ‘to elicit
a DM's preferences’. Some of these systems use the preferences of the
DMs, but these have to be directly stated, instead of using the system
itself to elicit the DMs' preferences as it is the case of C-Negotiation
Game [3], Inspire [10], and ICANS [13].
Another difficulty that DMs face is to infer their opponents' pre-
ferences [21]. To aid DMs in these aspects, software agents started to be
developed to carry out certain operations on behalf of a DM or an
analyst [22] and these were included in these ENSs and NSSs. These
agents need to receive various kinds of information to be able to work
on behalf of their principals [23], and they have been developed to play
different roles, such as: to negotiate the provision of a service by one
agent for another by considering what strategies and tactics to generate;
how best to evaluate and present offers [24]; to use a heuristic to make
the trade-off by using similarity criteria which includes automated
negotiation [25]; to find an equilibrium in negotiating multi-issues even
when both agents have uncertain information about each other [26]; to
find Pareto optimal solutions when the agents present non-linear utility
functions [27]; to use artificial neural networks to predict the oppo-
nents' counter-offers based on current and past offers [28] or to predict
the opponent's preferences in bilateral negotiation by using a Bayesian
approach which does not need data from previous negotiations [5].
Vahidov et al. [16] ran an experimental study which showed that the
use of agents might well lead to an improvement in performance for e-
negotiations. However, the agents must still keep on presenting offers
and counter-offers in order to reach an agreement that is satisfactory to
both negotiators. This process might take some time and a mediator
might be used to help the parties to find a compromise solution faster.
Dzeng and Ling [29] proposed the C-Negotiation platform which
uses agents to generate proposals based on their principals' preferences
by using a genetic algorithm. It has a mediator agent which searches for
a solution among those generated by the agents to maximize the joint
gains. Dzeng and Ling [29] realized that a shortcoming of their method
is that the DM could misrepresent his/her preferences in order to ma-
nipulate the negotiation process because the platform did not elicit his/
her preferences. Instead, the DM has to provide the payoff for each
alternative. The model presented in this article has similarities with C-
Negotiation, but it is significantly different because the DMs are unable
to manipulate the process since their preferences are elicited inside the
40
Automation in Construction 99 (2019) 39–51
platform which uses the Flexible and Interactive tradeoff (FITradeoff)
method [30,31]. This characteristic is what makes it different from the
other platforms presented in the literature. In addition, the mediator
agent proposed in this model can holistically consider all the pre-
ferences, criteria and issues all together in each round of the offer-and
counter-offer so that an integrative solution can be formed. Thus ne-
gotiators can expand the pie while each negotiator is aiming to reach
their Best Alternative To a Negotiated Agreement (BATNA) [7,8]. Fi-
nally, the model presented in this paper allows the main contractor to
drive the negotiation with all possible suppliers in one unique process,
thus making it possible for him/her to compare information in order to
reach the best possible deal.
Most agents do not work as mediators but on behalf of one party.
Moreover, the non-biased mediators found in the literature were used
to provide advice in the post-negotiation phase [10] or to elicit pre-
ferences from negotiators [20,32–34]. Thus, this gap in the literature
needs to be filled, since the idea of using a mediator agent is to reduce
the negotiation time. This can be achieved by using an elicitation
procedure prior to the negotiation and an unbiased mediator agent to
provide the DMs with the information necessary to reach an agreement.
Therefore, the main contributions presented in this article are: (i) the
proposition of a novel model for web negotiation that elicits the DMs'
preferences using partial information based on the FITradeoff method
[30,31]; (ii) in this model, a mediator agent is included to reduce the
number of interactions needed to reach an agreement between the
parties; (iii) the model focuses on the negotiation phase of construction
procurement, where the principal can compare performances among
subcontractors and decide whether or not it is interesting to split the
service among subcontractors. A further feature of this paper is that a
numerical application based on data of a real construction project is
presented to illustrate the use of this model which was tested by using a
prototype.
The use of the FITradeoff approach to elicit the range of parameters
for the proposed negotiation model relies on the fact that in construc-
tion procurement DMs usually make tradeoffs among criteria [35,36],
which seems to be the best form of eliciting preferences for both e-
negotiations and face-to-face negotiations [33]. In addition, the nego-
tiation process can be run under two different contexts, and the nego-
tiators might use, at their request, an unbiased agent as a mediator so as
to decrease the number of interactions between negotiators.
The article is divided into 5 sections. The first is this Introduction
while Section 2 gives an overview on preference elicitation for the
additive function. Section 3 presents the e-negotiation model and
Section 4 consists of a numerical application to illustrate the use of the
method. Some conclusions are drawn, and suggestions are made for
future lines of research in Section 5.
2. Developments on preference elicitation for the additive
function
Frequently DMs have difficulties in the preference elicitation pro-
cess, which becomes tedious and time-consuming due to problems not
being well defined and a lack of information. These characteristics
drove several authors to propose elicitation methods and procedures to
overcome such difficulties, such as [37,38]. To enable the use of partial
information, other methods have been presented in the literature
[39–43]. Although all of these methods were proposed for additive
models, according to de Almeida et al. [30] none of them kept the in-
itial assumptions used to elicit tradeoff weights [44,45], also called
scale constants. Due to its axiomatic properties, the tradeoff procedure
is considered more robust than other methods at eliciting scale con-
stants for the additive model, but experimental studies showed that
several inconsistencies can be found when it is applied [46].
FITradeoff [30,31] is an adaptation of the trade-off method for
eliciting criteria weights in additive models with partial information. It
uses strict preference statements rather than indifference preference
R.P. Palha
statements, thereby seeking to reduce the cognitive effort required from
the DM without compromising its axiomatic foundations [31]. In the
traditional tradeoff method, the DM is asked questions, the answers to
which he forms by making pairwise comparisons among the con-
sequences found in each of the criteria until he/she can make in-
difference statements. In other words, the DM has to state explicitly
what the exact values are that make the consequences equal. For ex-
ample, if the DM has 4 criteria to evaluate, and he/she is making a
pairwise comparison between criteria 1 and criteria 2, the information
provided is v1(b1) = v2(x2I) or v1(b1) ∽ v2(x2I). In order to find this
point, the DM ends up being questioned about several points, the an-
swers to which lead to finding the exact value of indifference, after a
calibration process. When the DM is asked to provide strict preference
statements, instead of making a great cognitive effort in order to state
an exact value, this effort is transformed into computational effort,
which is not significant for solving such linear programming problems
(LPPs). For the problem presented in the example, all that the DM has to
provide is the expression v1(b1) < v2(x2′) and v1(b1) > v2(x2″). These
are included in the LPPs presented in Eq. (1) in order to calculate the
result based on the space of weight vectors bounded by the partial in-
formation that the DM has provided. The basic output is the same,
namely the alternative chosen by the DM.
The elicitation heuristic of FITradeoff considers a continuous eva-
luation during the elicitation process, and thus it can be suspended
whenever a solution is reached. The solution is found by applying the
LPP presented in Eq. (1) to the partial information provided by the DM
during the preference assessment. To calculate the feasible alternatives,
the system considers dominance relations and provides the DM with
recommendations. The reason for requiring less cognitive effort from
the DM was to avoid errors, and this feature was evaluated by de Al-
meida-Filho et al. [31] who ran a test with real-world DMs. It was
verified that the FITradeoff procedure required fewer statements than
the tradeoff procedure proposed by Keeney and Raiffa [44] to reach a
solution, and thus required less cognitive effort from DMs.
n
max ∑ ki vi (xij), j = 1, 2, …, m
k1, k2, … , kn
i=1
s. t.
n n
∑ ki vi (xij) ≥ ∑ ki vi (xiz ), z − 1, 2, …, m, z ≠ j
i=1 i=1
ki + 1 ≤ ki vi (x i′) − ε for i = 1 to n − 1
ki + 1 ≥ ki vi (x i′ ′) + ε for i = 1 to n − 1
n
∑ ki = 1
i=1
ki ≥ 0, i = 1, 2, …, n (1)
where ki is the scale constant of criterion i.
vi(xij) is the value of consequence xij on criterion i
xi′ and xi″ are specifications provided by the DM and are based on
strict preference relations.
The unidimensional value functions are considered to be linear
[30,38]. The DM provides his/her preference order of the criteria and
after this procedure has been completed, the system makes a first at-
tempt to find a set of feasible solutions. If the DM decides not to choose
one of the available alternatives presented in the set of recommenda-
tions or if it is not possible to find a recommendation, the core of the
procedure starts based on a heuristic, which depends on the answer the
DM gives to each question on the assessment of preferences.
Therefore, the idea is to run the preference assessment of both ne-
gotiators in the e-negotiation platform, to allow free communication
between them and to keep track of the issues negotiated. In this WNSS,
the FITradeoff method is used to elicit the parties' preference structure
[30] in order to require less cognitive effort from them while keeping
the robustness of the tradeoff during the elicitation process. Therefore,
the possibility of using a mistaken value function to represent the
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Automation in Construction 99 (2019) 39–51
negotiators' preferences should decrease, thus ensuring the process is
more efficient because a better analysis is made of the offers and
counter-offers presented. The model also includes a mediator agent to
improve the negotiators' joint gains and to tighten the process by
helping the negotiators to explore the alternatives available.
3. Model for e-negotiation under flexible and interactive
preference elicitation
Negotiations in recent years have been strongly supported by NSS
[15]. The main idea is to help negotiators to structure the negotiation
process, as well as to improve the efficiency and effectiveness of the
deal. These NSSs emerge in different forms: to help the negotiators to
structure and analyze the negotiation problem, to elicit their pre-
ferences, to improve their communication, and to verify the efficiency
of alternatives [22].
The objective of this research study is to present a web-based model
which enables bilateral asynchronous negotiations to take place via the
Internet. Since there are no geographical restrictions on where con-
struction companies operate nowadays [18], having a method that, to a
large extent, allow principals (from now on called negotiators) to ne-
gotiate with supliers/subcontractors in other locations is imperative. In
addition, the platform should help negotiators to formalize their pro-
posal based on their preference information and to receive advice on
offers and counter-offers from a mediator agent. Therefore, some re-
quirements have to be met to reach a commitment that suits the parties
involved, for which the e-negotiation model, presented in Fig. 1, is
used.
Fig. 1 describes the three phases of the proposed model, namely (1)
pre-negotiation, (2) negotiation, and (3) post-negotiation. The pre-ne-
gotiation phase starts when the need arises to hire a subcontractor to
perform an activity in the project. Then, the general contractor has to
decide whether or not to negotiate with several prospective sub-
contractors. If so, a negotiation protocol should be drawn up, based on
the general contractor's needs or along with the prospective sub-
contractors.
Once the latter have been invited to be part of the procurement
process, all parties undergo a preference elicitation procedure which
uses the FITradeoff method. The output of this module are the weights
of the BATNA which are acquired using partial information and which
are afterwards used to evaluate each offer by considering their values
over each criterion.
Once all parties have provided preference information, the nego-
tiation phase starts with one negotiator presenting offers and counter-
offers. The mediator agent presented in Fig. 3 is used to guide the ne-
gotiation process. If the general contractor decides to invite several
prospective subcontractors, then another module of the mediator agent
presented in Fig. 5 will also be used. When this happens, the general
contractor will have collected comparative information of offers re-
ceived from all subcontractors and assesses their value to him/her.
The mediator agents shall present at the end of each interaction a
compromise solution or a set of compromise solutions to allow the
parties to choose the alternative which maximizes their joint gains. If
the parties cannot agree on a solution and they think that some in-
formation might be missing, they can always go back and use the
FITradeoff module again.
Finally, if the parties agree on the contractual terms, they can end
the process by making a deal, and the other parties are dismissed in the
post-negotiation phase. If they cannot agree on a deal, then the nego-
tiation is documented, and the general contractor has to start another
process. The DMs can go back and forward between the first two stages
of this process. Thus, they can review their preferences and offers be-
fore coming to an agreement.
The main input and output information required in this model is
shown in Fig. 1 but it is complemented by information that is given in
three other Figures, namely, in Fig. 2, for use in the adapted FITradeoff
R.P. Palha Automation in Construction 99 (2019) 39–51

Fig. 1. Flow chart of the e-negotiation model proposed.

42
R.P. Palha
Fig. 2. Flow chart of the adapted FITradeoff elicitation process.
elicitation process; in Fig. 3, for the mediator agent; and in Fig. 5, which
presents how the mediator agent guides a 1-N negotiation. In addition,
all Figures have a key which indicates when the system takes the ac-
tion/decision or when the action is performed by a human actor.
This model was built for an integrative environment [7,8]. As for-
mulated by Raiffa [7], when a negotiation is integrative, the negotiators
convert a single-factor problem into a multiple-factor problem. This
type of bargaining is called cooperative because it is no longer true that
by increasing one's profits, the profits of the other party must be re-
duced. Thus, they can work together to enlarge their joint gains. To take
the multiple factors into account, the negotiators undergo a Flexible
and Interactive Preference Elicitation process called FITradeoff [30].
Some businesses are characterized by one negotiator searching for
several other negotiators in order to hire a service or supply of mate-
rials. These negotiations are neither bilateral nor multilateral because
the parties do not all negotiate with each other; only one party ne-
gotiates the same set of issues with several other parties. This is what
happens in the construction industry. For example, suppose that one
contractor needs to hire the supply of concrete and so contacts several
suppliers to decide which one would be the most appropriate. The
contractor does not contact one enterprise at a time, but all of them
concomitantly. To prevent one negotiator starting several similar pro-
cesses, the model lets the main contractor to invite several prospective
subcontractors to take part in one single bidding process. Whenever the
negotiator contacts several parties, we will call this negotiator the
dominant party and we describe this negotiation as 1-N, since one party
negotiates with multiple parties.
Thus, the model can be used in two different forms: only two parties
will negotiate a multiple-issue contract or the negotiator/contractor can
negotiate the same contract with multiple parties. Both situations will
be discussed below and the main differences will be presented. The
second type of structure presented in this model is particularly im-
portant for procurement in the civil construction industry but can be
used in other environments.
3.1. Phase 01: pre-negotiation
The first phase of this model is the pre-negotiation stage. Prior to
any elicitation of preference structures, the negotiators have to for-
malize the negotiation protocol and input the data to do with the ne-
gotiation. The negotiation protocol consists of: (1) specifying the object
of negotiation, (2) determining the issues to be negotiated; (3) verifying
which of these issues should be negotiated; (4) deciding whether or not
it will be possible to include other issues during this process, should
they emerge; (5) determining the negotiators involved; (6) determining
the criteria to be used to evaluate the issues, their ranges and interval of
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Automation in Construction 99 (2019) 39–51
variation; and (7) determining the duration of the negotiation.
Reaching an agreement on all of these points is already a negotiation
process in itself and this will strongly influence the result of the deal.
The parties have to discuss all points to allow the use of FITradeoff to
elicit their preferences, which is one of the main contributions of this
model: a tool to aid the negotiators to provide their preference in-
formation in order to explore the possible agreements. Another im-
portant contribution of this model is how the mediator agent guides the
negotiators to expand the pie while searching for the best possible
agreement for both.
In this model, the negotiators are only aware of their own pre-
ference structure. No negotiator is able to use the system to visualize
the opponent's preference structure in any shape or form whatsoever.
The only information the negotiators share is the negotiation protocol
and, during the negotiation, they will be able to learn about the op-
ponent from the information provided in each interaction. The med-
iator agent should increase the volume of information each of the ne-
gotiators receives without directly informing one party of the other
party's preference structure. This should help the negotiators to reach a
compromise solution with fewer interactions than would be the case if
there were no mediator. The second phase is where the negotiation
itself takes place.
After determining the negotiation protocol, the weights or scale
constants of all negotiators have to be assessed to calculate the value of
each alternative. The elicitation process is a problem which has re-
ceived attention for several years and still does. Evidence has been
found that different elicitation methods present significant differences
in the elicited attitudes towards risk and in the probability weighting.
These directly affect DMs' choices [47]. In addition, Aloysius et al. [48]
verified that DMs' acceptance of a decision support system relies on the
preference elicitation technique. Their findings pointed out that even
though a technique may have a normative superiority, its use may be
less acceptable if it requires too much effort from the DM.
As presented in Table 1, most ENS/NSS when using a multi-attribute
function to calculate the value of alternatives, require the DM to pro-
vide direct preference statements which might bring bias and distor-
tions to the process [49,50]. These preference statements require the
DMs to inform a value for each consequence and criterion. The model
presented in Fig. 1 includes the elicitation process within the NSS and
uses the FITradeoff method to elicit the DMs' preferences. This tech-
nique was chosen because it reduces the cognitive effort required from
the DM compared to the traditional tradeoff as explained in Section 2.
As in SMARTS [38], FITradeoff considers linear marginal value
functions [30]. The criteria should monotonically increase or decrease
for both negotiators. It is important to note that usually, the negotiators'
direction of preference will be opposite to each other's, but this is not a
R.P. Palha
Fig. 3. Model of the mediator agent to guide negotiation process in 1–1.
necessary condition. There are situations where both negotiators desire
to maximize or minimize the same issues. When this behavior arises, it
is important to agree on the level of the issue, but it is not necessary to
consider it during the negotiation itself.
The FITradeoff method analyzes only the available alternatives,
thereby exploring the weight space. Thus, the method requires the al-
ternatives to be made available in order to calculate the scale constants
based on the DM's preference information. However, in a negotiation
process, the alternatives are not available in advance; they are pre-
sented during the negotiation. There is an incompatibility between the
negotiation process and the FITtradeoff method, which was designed
for a single DM decision process. To overcome this issue, it has not been
necessary to modify FITradeoff method, but rather to exhaustively
44
Automation in Construction 99 (2019) 39–51
generate all possible combinations of performance values among cri-
teria. This is done so as to create all possibilities for alternatives prior to
eliciting preferences, thereby enabling the evaluation. Hence, after the
negotiators agree on the criteria and their range, the system has to
exhaustively create all possible combinations of criteria, as described
along Fig. 2.
This will only be possible if the DMs also provide an interval of
variation between points in each criterion. Therefore, if the criterion
“time required to conduct the activity” varies from 30 to 90 days, and
the increase defined by the DMs is of 15 days, the system has to gen-
erate 5 points in this range: 30, 45, 60, 75 and 90. These will be
combined with other criteria to generate the alternatives. For instance,
if there is another criterion, for example, “price”, with 3 points
R.P. Palha Automation in Construction 99 (2019) 39–51

Table 1
Comparison of ENS/NSS presented in the literature.
ENS/NSS Elicitation Process Mediation Process Comments

Negoplan [9] Only one party provides Not applicable The system was built for an asymmetric environment giving
information using rules support only to one negotiator
Inspire [10] The negotiators provide direct The system verifies the efficiency of each offer It was created for training purposes, the pre-negotiation works as
preference statements a preparation, and the negotiation protocol is previously defined
for the experiment
Negoisst [11] Not applicable Not applicable The system was created to improve the communication between
parties and runs an issue-to-issue process in order to reach a deal
WebNS [12] Not applicable Not applicable Focus on communication and definition of issues to be negotiated.
The deal is reached in an issue-by-issue process.
SmartSettle [14] The negotiator informs his/her Presents efficient alternatives which are in the Commercial tool that seeks to solve conflicts
BATNA and satisfaction levels Pareto Front based on the negotiator's
satisfaction levels
C-Negotiation Game The negotiators provide direct Uses Genetic Algorithm to generate a certain The system was created for the construction procurement
[3,29] preference statements number of offers environment and the issues are limited to the pre-categorized
ones

available, then the system has to generate 15 alternatives which are all
the possible combinations among 5 possibilities for “time required to
conduct the activity” and 3 possibilities for “price”. If the DMs do not
provide an interval of variation, the system will, by default, generate a
5-point interval. Based on this interval and the range of each criterion,
the systems will exhaustively generate all possible offers, and these are
evaluated using the scale constants calculated after assessing the DMs'
preference information. Thus, the points of each criterion can be built
as in Algorithm 1.
Algorithm 1. Generation of alternatives to be evaluated.
Step 1: The DMs agree on the criteria to be used to describe the issues, the upper bound
of criterion , , and the lower bound of criterion , . an offer. The negotiator, who henceforth will be called the seller, will
Step 2: For criterion = 1: points are generated or the increment is calculated
considering that:
If the DMs define the increment for criterion ,
the number of available points is calculated considering
1+( − )⁄
Else =5
the increment for criterion is calculated considering =( − )⁄4
End If
Step 3: Based on the number of points or the increment, it is necessary to define the
points available for criterion considering that ( )= + ∗ , where
.
Step 4: Generate alternatives, which are all possible combinations among criteria.
In this model the DMs themselves do not present the alternatives at
any point. All alternatives are automatically generated. The system
evaluates these alternatives, for which the DMs' scale constants are
used, and presents them to the DM who only then may start the ne-
gotiation process. Note also that the preference information from both
negotiators is elicited before the negotiation begins. Otherwise, the
system would not be able to evaluate the offers/counter-offers for both
sides and mediate the negotiation process.
It is important to highlight that the FITradeoff was built for the
choice problematic. Even though a proposition considering distillation
of alternatives to build a rank has been presented by de Almeida-Filho
et al. [31], it has not been adapted to the ranking problematic. The
alternative which represents the best deal for each negotiator is de-
scribed as the BATNA [7,8]. In addition, by using the FITradeoff [30]
method, the alternative with the highest value for that DM is presented,
as are the minimum and maximum limits for each criterion. Hence, in
this context, this alternative is considered the BATNA for the nego-
tiator. The set of constant scales presented by the method for the
BATNA is used to calculate the overall value of all other alternatives by
using Eq. (2).
V (x j ) = Σn(i = 1) ki vi (x j ) (2)
where: V(xj) is the overall value of alternative xj;
ki is the scale constant of criterion i and ∑i=1nki = 1;
vi(xj) is the value of the consequence of criterion i.
3.2. Phase 02: negotiation
After both multi-attribute functions are defined, the second phase
begins. This stage is where the offers and counter-offers are made
during which a mediator agent helps the negotiators to decrease the
number of interactions. One of the negotiators has to start by presenting
probably do this. The negotiator called the buyer has already provided
information about the whole process, regarding the issues that have to
be taken into account and the specifications so as to allow the seller to
=
take part in the selection.
The system has to calculate the value that each alternative re-
presents for each of the negotiators. Next, it has to calculate the joint
value of each alternative to help the negotiators to reach a decision
faster. Fatima et al. [26] stated that negotiations that deal with more
than one issue can be handled in two ways: the procedure can either
bundle the issues or consider one issue at a time sequentially, also
called issue-by-issue. This model uses the first option, which requires
more complex computation, but it allows the negotiators to explore the
trade-off among criteria.
Kersten and Szapiro [51] state that during the negotiation process,
the negotiators' strategies and aspiration levels might change. Even
being aware of this, and realizing that the negotiators may change their
preferences during the negotiation procedure, as a matter of simplifi-
cation and because the process would become tiring and repetitive, the
negotiators will answer the FITradeoff protocol only at the beginning of
the negotiation or upon request. Accordingly, the weights will not be
modified unless the negotiators decide to review their preferences or
review the protocol of negotiation to include more criteria or more
information that might come to light during the interactions. This may
be the case when the negotiators come to a halt and realize that the
criteria previously defined are not enough to reach a compromise so-
lution.
The mediator presented in Fig. 3 is unbiased. Therefore, the solu-
tions, in this case, are those that maximize the joint values of the ne-
gotiators, not the individual value of one of them. The main idea is that
after the seller has presented the first offer, the buyer will be provided
with information regarding all available alternatives that in his/her
preference structure represents a value at least as good as that first
offer. Algorithm 2 presents how the agent mediator verifies the alter-
natives to be proposed to the negotiator who received the offer and aids
him/her to make a proposition that reduces the number of interactions.

45
R.P. Palha
The agent has to provide information, not only of the alternatives,
which are optimal but also to inform the negotiator of all the other
alternatives that are at least as good as the offer he/she received, even
though these will not drive them to maximize the joint gains. An offer is
considered optimal when it reaches the greatest possible value for the
joint gains of the negotiators. Thus, the buyer will visualize a matrix,
which has all the information necessary for him/her to present a
counter-offer that will improve the joint gains. The mediator will be
activated after one of the negotiators has made the first move.
Algorithm 2. Alternatives provided by the agent mediator.
Step 1: Negotiator 1 makes an offer.
Step 2: The value of the offer is compared to the value each alternative represents to
Negotiator 2 to decide if the alternative will be presented
For j=1:m
If ( )≤
∈ offer has been accepted, the system takes the negotiators to the third
Else
∉
End If
End For
Where is the subset of alternatives to be analyzed by Negotiator 2.
Step 3: For alternative j= 1: , the joint gains are analyzed to verify what alternatives
optimize the joint gains: = + .
Step 4: The agent mediator finds the maximum value of and compares it with all the
alternatives:
For = 1:
If = max( + )
∈ The negotiators are informed that the process is over and they
Else
∉
End If
End For
Where is the subset of alternatives that optimizes the joint gains of the
negotiators.
Fig. 4 shows the screen which has the matrix provided to the ne-
gotiators by the mediator agent in the prototype created in MATLAB.
The matrix includes the value of each alternative in each criterion; the
overall value of each alternative for that DM, the sum of the overall
value for both negotiators in a column called “T”; and a final column
with information on whether or not that alternative maximizes the joint
gains. Whenever the final column has a value of 1, the alternative
maximizes the joint gains. The alternatives or possible offers are pre-
sented in descending order, first come the alternatives that maximize
the joint gains and then the other alternatives.
The mediator will not impose any decision on the negotiator, al-
though it would enable their utility or value functions to be compared
indirectly. Thus, the negotiators are free to proceed in a competitive
game instead of a cooperative one. However, the model was not built
Fig. 4. Matrix presented in the prototype of the e-negotiation model by the mediator agent.
46
Automation in Construction 99 (2019) 39–51
for a distributive negotiation. The model also provides information on
the value that each offer and counter-offer represents for each nego-
tiator and a graphic to help them visualize where each of the offers is
located in their preference levels.
In case the negotiators cannot reach a final agreement in five in-
teractions, the system will ask if they would like to review their pre-
ferences that appear in the negotiation protocol. In addition, if the set of
weights results in generating more than ten alternatives that maximize
the joint gains, the negotiators will also be asked to review their pre-
ferences, in order to help them minimize the time required for that
negotiation. In this last case, only the alternatives belonging to this
“optimal” subset are considered for the elicitation process.
The process ends when the negotiators reach a final decision or
when the time defined for the negotiation ends. When it finishes due to
a time restriction, the negotiators have two options: either to accept the
last offer or to finish the negotiation without an agreement. After an
and last phase: post-negotiation.
3.3. Phase 03: post-negotiation
At this point, the negotiators are no longer allowed to go back and
revise their preferences. However, the system can store this information
in order to allow them to go back and learn about their interactions.
The system holds information about each negotiation and on the per-
formance of the negotiators in all offers and on the conditions of the
agreement, if there is one, to allow the deal to be documented. Even
after the negotiation ends, a negotiator will not have access to the other
party's preference information.
should save all files in order to use that information for the contract
when a deal is made. The values presented for each offer are calculated
using the last set of scale constants. Therefore, if some review of pre-
ferences took place during the procedure, the values of the first alter-
natives will not be the ones presented before that review. These have to
be re-calculated and presented, based on the latest information because
the values will be more calibrated because they take the revised scale
constants into consideration. The review is only suggested if there is a
need to increase the amount of information about the problem. Both
negotiators will receive the suggestion that a review be undertaken,
when these situations occur, but they do not need to accept it and go
through the whole process again, if they believe it is not necessary.
3.4. Negotiation 1-N
The main difference between the 1–1 model and the 1-N model is
that in the second, the dominant party will be the one that defines the
negotiation protocol and instead of visualizing one negotiation at a
time, he/she will be able to visualize all negotiations and the current
value of each offer/counter-offer received. This also means that the
optimal solution might change between processes because the overall
value of the alternatives is modified by both parties' scale constants. In
R.P. Palha
Fig. 5. Model of the mediator agent to aid contractor compare alternatives 1-N protocol.
addition, the mediator will not be able to provide information about the
other parties to the dominant party but will be able to inform them if
splitting the negotiation between two or more parties would bring
about a better result to the contractor as presented in Fig. 5, considering
the 1–1 negotiation protocol presented in Fig. 3. The final outcome may
also be a pool of subcontractors. Therefore, the contractor should build
a portfolio of subcontractors and allocate percentages of the activity to
them. Often in construction procurement, the winning bidder ends up
cooperating with its competitors in the auction, since the firms con-
cerned are usually small firms in comparison with the size of the pro-
ject, and therefore are unable to supply all that is required on their own
[52].
The negotiation can finish when the time is up or the dominant
party decides to accept one of the offers it has received from at least one
seller. When the time constraint is reached, the system will ask the
dominant party to dismiss all parties or to choose one of the available
options. All parties dismissed will be informed that the process is over
and they were not hired. The dominant party's documentation includes
all the interactions that show what his/her value was with regard to
each offer/counter-offer and the final deal. The other parties' doc-
umentation includes only their interactions and the value that each
interaction represented to them and the hired party will receive the
documentation of the deal. The buyer, who is the dominant party,
cannot oblige any of the sellers to accept one of his/her offers.
4. Numerical application
In order to exemplify how the model works, a numerical application
is presented. This phase of the framework only takes place after the
selection model has been used. Therefore, the illustrative example is
based on the problem presented in Palha et al. [53], which comes from
a real situation. The illustrative example is the construction of a
brewery in the state of Pernambuco, Brazil. The expected cost of this
construction was US$ 70 million. It was a cost-plus contract, which
means that this budget is only an approximation and several activities
might be subcontracted, which necessarily entails negotiating with the
bidders at some point. The negotiation of the Continuous Flight Auger
(CFA) Stake is presented below.
47
Automation in Construction 99 (2019) 39–51
4.1. Phase 01: pre-negotiation
The negotiator considered in this application is a Director of
Construction (DC) of a big contractor in Brazil. To model her objectives
four issues need to be discussed: the price to accomplish the activity in
dollars (g1), the time needed before starting the service in days (g2),
the time required to conduct the service in days (g3) and the
Maintenance service level (g4). Their values and descriptions are given
in Table 2. Since this is a situation similar to that presented in Section
3.4, the DC created the negotiation protocol and provided the in-
formation presented in Table 2. If it were a 1–1 negotiation, the parties
would have to create it together
In this model, the alternatives are the possible offers that may arise
during the negotiation with only one negotiator. In the context of ne-
gotiation, the alternatives are unknown beforehand; they are presented
during the negotiation process. However, it is not possible to elicit the
scale constants using the FITradeoff method without providing alter-
natives before the preference assessment. Thus, the alternatives were
generated by exhaustively combining all issues in all possible intervals.
Criterion g1 had 5 possible points, criterion g2 had 3 possible points,
criterion g3 has 6 possible points, and criterion g4 had 5 possible points.
Thus, the combination of these issue options generates 450 possible
offers.
As previously explained in Section 3.1, the negotiators have to agree
on the negotiation protocol and, prior to eliciting preferences, provide
information regarding the direction of preference of each criterion. This
information is presented in Table 3.
The information in Tables 1 and 2 was used as input data and to
elicit the preference information of each negotiator. Note that the di-
rection of preference in all criteria was in the opposite direction for the
negotiators. Therefore, the best alternative for one negotiator is the
worst for the other. The negotiator who will represent the Contractor
during the negotiation is the DC. Therefore, all preferences regarding
this negotiation are based on her profile.
The scale constants presented here were assessed using the
FITradeoff method. The preference order of the criteria presented by
the DC was g3 ≻ g2 ≻ g1 ≻ g4 and for the subcontractor, this was
g4 ≻ g1 ≻ g2 ≻ g3. Table 4 presents the scale constants calculated when
applying the FITradeoff method, as well as the maximum and minimum
limits of this solution. Table 5 shows the alternatives presented as the
R.P. Palha Automation in Construction 99 (2019) 39–51

Table 2
Issue options for negotiating the Continuous Flight Auger (CFA) Stake.
Issues to be negotiated Description Issue options

Price in dollars (g1)
Time needed before starting the
activity in days (g2)
Time required to conduct the activity
in days (g3)
Maintenance service level (g4)
Cost presented by the company participating in the selection
Period after which the company expects to be ready to start the
service
Period for conducting the service
The maintenance team is able to work on its own equipment used in
the activity: either preventive or corrective, when needed
US$ 450,000.00–US$ 650,000.00
Interval of variation: US$ 50.000,00
10–30 days
Interval of variation: 10 days
60–240 days
Interval of variation: 30 days
Qualitative (1 to 5):
1 – Company does not keep an acceptable level of maintenance
service level;
2 – The maintenance team works for the project for 1 or 2 days per
week, but has no flexibility as to day or shift;
3 – The maintenance team works for the project for 1 or 2 days per
week in any shift, but is not flexible about the day;
4 – The maintenance team works for the project for 1 or 2 days per
week and is flexible about both day and shift;
5 – The maintenance team works for the project every day of the
week and during any shift.

Table 3 and the maintenance service level is 1 day. When the DC counter-offers
Direction of preference of the issue options in the Continuous Flight Auger this alternative, the subcontractor is furnished with only 21 possible
(CFA) Stake negotiation. offers, none of which maximizes the deal for both negotiators.
Issues to be negotiated Contractor Subcontractor Therefore, the negotiators were able to reach an agreement with only
two interactions. The graphs provided to each of them are those shown
Price in dollars (g1) Minimization Maximization in Fig. 6.
Time before starting the service in days (g2) Minimization Maximization
The graph presented in the prototype is individual, meaning that
Time required to conduct the service in days (g3) Minimization Maximization
Maintenance service level (g4) Maximization Minimization each negotiator is only able to view his/her graph. The reason is that
this graph presents the value that each offer and counter-offer re-
presents to each negotiator. Red bullets represent the offers received by
Table 4 the opponent, whereas blue bullets represent the offers the negotiator
Scale constants for negotiators for the Continuous Flight Auger (CFA) Stake made to the opponent. Thus, by visualizing the graph, the negotiator
negotiation. can see who presented the offer and the value that each offer represents
Negotiator Issues to be negotiated
to him/her. Additionally, this information is made available in a table
presented to the negotiators during the negotiation process.
g1 g2 g3 g4
4.3. Phase 03: post-negotiation
Director of Construction Scale Constant 0.1333 0.2667 0.5333 0.0667
Maximum Limit 0.2222 0.2667 0.5333 0.2000
Minimum Limit 0.1250 0.2000 0.4000 0.0667 In the post-negotiation phase, the negotiators were informed about
Subcontractor Scale Constant 0.2963 0.0741 0.037 0.5926 their performance regarding the process. When analyzing the data, it
Maximum Limit 0.2963 0.0741 0.037 0.5926 can be verified that by considering the scale constants presented in
Minimum Limit 0.2963 0.0741 0.037 0.5926
Table 4, no other alternative presents a better performance when
evaluating the joint gains. However, individually the negotiators could
Table 5
achieve better performance, but it is highly unlikely that they could
BATNA of each negotiator for the Continuous Flight Auger (CFA) Stake nego- reach a deal by focusing on alternatives that would only improve their
tiation. own overall value.
The question that arises is the robustness of this solution. To verify if
Negotiator Alternative Issues to be negotiated
the solution would change for any reason, some variation was imposed
g1 g2 g3 g4 over the scale constants while keeping the same criteria in the same
order. It was found that the solution does not change unless the order of
Director of Construction O005 450,000 10 60 5 preference of the criteria is modified. Moreover, no other alternative
Subcontractor O446 650,000 30 240 1
will present a joint value higher than that proposed by the agent. To
illustrate the behavior of this model, a different scenario will be pre-
BATNAs to each negotiator. sented: for the subcontractor, two criteria switch places, and the criteria
are given the same values for both negotiators.

4.2. Phase 02: negotiation 4.4. Alternative scenario

The first offer is presented by the Subcontractor and is his own
BATNA, which represents an overall value of zero for the DC. When the
DC received this offer, the system informed her that any other alter-
native would represent a better deal for her, and showed the value of all
available offers and her BATNA. The alternative at the bottom of the
Table was the one that maximized the deal for both negotiators. This
alternative has a price of US$ 650,000; the time needed before starting
the service is 10 days; the time needed to conduct the service is 60 days
In this new proposition, criteria g1 and g2 switch places for the
subcontractor. Thus, instead of a ranking order of g4 > g1 > g2 > g3,
this negotiator presents an order of g4 > g2 > g1 > g3. Since the
criteria have the same values, which are related to the order they take
up, the scale constants are those presented in Table 6. The BATNA of
each negotiator remains the same.
Using Table 7, the interactions between the negotiators under these
circumstances can be verified. The first offer that was proposed by the

48
R.P. Palha Automation in Construction 99 (2019) 39–51

Fig. 6. Overall values of offers during interaction.

Table 6
Scale constants for negotiators in the alternative scenario for the Continuous
Flight Auger (CFA) Stake negotiation.
Negotiator Issues to be negotiated

g1 g2 g3 g4

Director of Construction Scale Constants 0.1333 0.2667 0.5333 0.0667

Subcontractor Scale Constants 0.1333 0.2667 0.0667 0.5333

Table 7
Interactions of the alternative scenario for the Continuous Flight Auger (CFA)
Stake.
Negotiator Issues to be negotiated Overall Value
who made the Fig. 7. Overall values of offers in the alternative scenario for the DC.
offer g1 g2 g3 g4 DC Subcontractor Joint

Subcontractor 650,000 30 240 1 0 1 1

DC 450,000 10 60 1 0.9333 0.5333 1.4666
Subcontractor 650,000 30 60 1 0.5333 0.9333 1.4666
DC 500,000 10 60 1 0.9000 0.5666 1.4666
Subcontractor 550,000 20 60 1 0.7333 0.7333 1.4666

subcontractor generated a suggestion with 449 possible offers for the

DC. This means that only the proposition made by the subcontractor
could be worse than any other alternative. However, in this first pro-
position, the mediator agent advised that eleven alternatives would
maximize the joint gains. When the DC proposed a counter-offer by
using one of these alternatives, the subcontractor is presented with only
206 alternatives that could be better than the second offer and 10 of
those would maximize the joint gains. Table 7 presents five interac-
Fig. 8. Overall values of offers in the alternative scenario for the subcontractor.
tions, where the joint gains remained the same since the negotiators
used only optimal alternatives to reach a deal.
It is clear that the overall value of each alternative is different for during the negotiation process, as are the values of each offer and
each negotiator, even though their sum is the same. The idea is that the counter-offer. The negotiators can see who made the offer and the value
parties keep interacting until a decision is made. It is possible to verify it represents to him/her, as well as how the process of concessions was
that criterion g4 was set to its minimum value, which maximizes the conducted.
values for the subcontractor and minimizes them for the DC. This also
occurred with criterion g3, but it behaved in the opposite direction. 4.5. Group decision
Therefore, the negotiators, to reach an optimal agreement, only have to
modify two issues in their offers, namely those represented by criteria The whole example was presented as if the activity to be negotiated
g1 and g2. Moreover, this is exactly what happens in the four interac- was performed by only one DM. However, it is possible that this will
tions after the first set of information presented by the mediator agent. become a Group Decision, thereby leading to a Many Parties, Many
In order to show that even when the number of optimal alternatives Issues negotiation [7,8]. When it comes to this point, then the DMs have
is greater than ten, the process is completed with few interactions, the to be considered as one unique coalition, since all of them share the
constraint of asking the negotiators to review their preferences was same objectives regarding the Contractor and its interests. Moreover,
relaxed to create this alternative scenario. Figs. 7 and 8 present the even though they have individually different preferences when it comes
values of each interaction. This graphic is provided to the negotiator to the negotiation itself, they will probably share the same objectives.

49
R.P. Palha
Thus, the procedure consists of aggregating DMs' initial preferences and
the scale constants to be used are the aggregate of the DMs' preferences.
4.6. Managerial impact
The web-based model for negotiation is adapted to the civil con-
struction context, thus aiding DMs of main contractors to negotiate the
same activity with different subcontractors and allowing them to
compare the conditions presented by each subcontractor in terms of the
value of the proposition. Also, FITradeoff is a flexible and interactive
method that reduces the cognitive effort required of the DM. Thus, the
DM will not need to keep answering a lot of questions in order to build
his/her preference information. The agent mediator helps by reducing
the number of interactions between negotiators. Therefore, this model
has potential to help the DMs in contractors to structure the negotiation
with subcontractors, while keeping the information generated during
the negotiation and yet requiring reduced effort from the parties in
order to reach an optimal compromise solution.
5. Summary and future work
An e-negotiation model in which the DM's preferences are elicited
using the FITradeoff method and an unbiased agent-mediator is pre-
sented. An agent mediator aids the parties to reach an agreement faster
and aims to improve the joint gains. The negotiation platforms found in
the literature present different objectives. The target of some of these is
to elicit payoffs or by using an unbiased agent-mediator that helps the
DM to express his/her preferences. In the model proposed, the pre-
ference elicitation method was built so as to decrease the DM's cogni-
tive effort by questioning him/her based on a strict preference relation
instead of an indifference relation. In addition, the mediator agent does
not help the DMs to elicit their preferences, but to realize which com-
mitment could be most easily accepted. Thus, he/she not only provides
indirect information on the opponent's preference information but also
presents how to improve the negotiation regarding the two parties. The
e-negotiation model could also be parametrized, in the way that would
best suit the procurement process in the construction industry, to aid
companies to visualize several negotiations with the top-ranked bidders
in order to verify the best compromise solution.
The model presented was not implemented in a WNSS. The eva-
luations were all verified using a prototype implemented in MATLAB in
order to analyze the behavior of the model. The system implemented
will have to use a database to store all the information and prevent
information flowing from one user to another. The FITradeoff method is
already implemented in an application, but it is directed to the analysis
of one user at a time. It considers a consequence matrix with a group of
alternatives, which behaves differently than in the negotiation context,
where there is no such a matrix. Therefore, the application has to be
adapted in order to allow the feature of generating the alternatives
instead of asking the DMs to provide them.
In future lines of research, experiments involving real-world nego-
tiations should be analyzed in behavioral studies to evaluate negotia-
tors' behavior when they use this model, the time spent in negotiation
and the efficiency of the model. This model should be enhanced with an
interface designed to assist negotiators within this process, and in-
cluded in an e-negotiation platform such as Inspire [10], Negoisst [11],
or GRUS [54], which may allow broader experiments to be undertaken
that also take different cultural aspects into account. In addition, it is
important to verify if the negotiators attempt to keep a cooperative
behavior, otherwise there is little point in having a mediator agent. For
instance, another advantage of expanding the proposed negotiation
model into an e-negotiation platform would also allow other kinds of
company to address supply negotiation, such as those that adopt a
Fairtrade policy, and also help main contractors who are interested in
working in emerging countries.
50
Automation in Construction 99 (2019) 39–51
Conflict of interest
The author declares that there is no conflict of interests regarding
the publication of this paper.
Acknowledgment
The author is grateful to CDSID for making a version of FITradeoff
available, which has been used for assessing individual DM's tradeoffs.
The author also would like to thank the anonymous reviewers for all
valuable suggestions that enhanced the contribution of this paper.
Funding sources
This research did not receive any specific grant from funding
agencies whether in the public, commercial, or not-for-profit sectors.
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