Multi-Party Negotiation Support

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Intl. Trans. in Op. Res. 15 (2008) 717–737 RESEARCH
A win–win method for multi-party negotiation support

Markku Kuulaa and Antonie Stamb
a
Helsinki School of Economics, Runeberginkatu 14-16, FIN-00100 Helsinki, Finland
E-mail: kuula@hkkk.fi,
b
Department of Management, Trulaske College of Business, University of Missouri, Columbia, MO 65211, USA
E-mail: stama@missouri.edu
Received 20 September 2005; received in revised form 4 February 2008; accepted 12 February 2008
Abstract
In this paper, we introduce an interactive multi-party negotiation support method for decision problems
that involve multiple, conflicting linear criteria and linear constraints. Most previous methods for this type
of problem have relied on decision alternatives located on the Pareto frontier; in other words, during the
negotiation process the parties are presented with new Pareto optimal solutions, requiring the parties to
sacrifice the achievement of some criteria in order to secure improvements with respect to other criteria.
Such a process may be vulnerable to stalemate situations where none of the parties is willing to move to a
potentially better solution, e.g., because they perceive – rightly or wrongly that they have to give up
more than their fair share. Our method relies on ‘‘win–win’’ scenarios in which each party will be presented
with ‘‘better’’ solutions at each stage of the negotiations. Each party starts the negotiation process at some
inferior initial solution, for instance the best starting point that can be achieved without negotiation with
the other parties, such as BATNA (best alternative to a negotiated agreement). In subsequent iterations, the
process gravitates closer to the Pareto frontier by suggesting an improved solution to each party, based on
the preference information (e.g., aspiration levels) provided by all parties at the previous iteration. The
preference information that each party needs to provide is limited to aspiration levels for the objectives, and
a party’s revealed preference information is not shared with the opposing parties. Therefore, our method
may represent a more natural negotiation environment than previous methods that rely on tradeoffs and
sacrifice, and provides a positive decision support framework in which each party may be more comfortable
with, and more readily accept, the proposed compromise solution. The current paper focuses on the
concept, the algorithmic development, and uses an example to illustrate the nature and capabilities of our
method. In a subsequent paper, we will use experiments with real users to explore issues such as whether
our proposed ‘‘win–win’’ method tends to result in better decisions or just better negotiations, or both; and
how users will react in practice to using an inferior starting point in the negotiations.
Keywords: negotiation; group decision support; interior point methods
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718 M. Kuula and A. Stam / Intl. Trans. in Op. Res. 15 (2008) 717–737
1. Introduction
Many real-life decision problems involve multiple, conflicting criteria. For example, when making
an investment decision, management has to take into consideration how their decision impacts the
firm in terms of, among others, marketing, finance, personnel and operations. The decision
problem may involve not only multiple criteria, but also multiple decision makers, requiring a
resolution of both the multi-criteria nature of the problem and the group decision process through
which the multiple decision makers arrive at a mutually acceptable decision. Frequently, a group
decision problem involves negotiations between the different parties, aimed at identifying
an acceptable compromise solution. For example, when selling its products, a company may
negotiate with the buyer about the sales price as well as terms of delivery and payment.
Multiple criteria decision problems have been studied extensively over the past 20 years (see
Korhonen et al., 1992; Dyer et al., 1992), especially on the theory side, resulting in various
different methods, tools and systems to support a single decision maker in exploring the problem
contingencies and select the most preferred solution. The corresponding literature on methods for
solving multiple criteria problems in a group decision framework is sparser. This is particularly
the case for constrained multi-party multi-criteria decision problems (Raiffa, 1982; Korhonen
et al., 1986; Shakun, 1988).
In this paper, we develop a support system for negotiation in a multiple criteria environment.
The remainder of this paper is organized as follows. In Section 2, the research pertinent to our
method in the areas of negotiation and multiple criteria decision making is reviewed briefly,
followed in Sections 3 and 4 by an introduction of our negotiation modeling framework and a
discussion of the rationale for using interior point methods in the case of cooperative negotiations.
In Section 5, our negotiation support system is illustrated with an example, and extensions
of our method are indicated in Section 6. The paper concludes with final remarks in Section 7. Our
current paper focuses on the introduction of the concept, the algorithmic development of
our method, and an illustrative numerical example. User-related issues and the effectiveness of our
method in practice will be addressed in a subsequent paper that involves an experimental study.
2. Literature review
Decision problems that involve both multiple criteria and multiple decision makers can be
classified in several different ways. One characterization is to distinguish between bargaining,
negotiation and group decision making. The bargaining problem involves two parties, and a
compromise solution is not necessarily required. If no agreement on an acceptable compromise
solution is reached, the parties can terminate the bargaining process, and pursue an agreement
with new parties.
The negotiation problem involves p parties ( pX2). Kersten et al. (1991, p. 1269) describe
negotiation as ‘‘. . . a form of decision-making with two or more actively involved agents
who cannot make decisions independently, and therefore must make concessions to achieve
a compromise.’’ Moreover, ‘‘. . . the rationale for the study of negotiation is not restricted
to an analysis of the behavior of bargaining agents. Negotiation is also a method of conflict
resolution, and as such is used in modelling of decision processes’’. The negotiation process
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usually involves multiple criteria and many different issues (Ehtamo et al., 1999, 2001; Raiffa
et al., 2002). Although criteria and issues are similar, they differ in that a criterion includes
information regarding the direction of improvement (e.g., minimize costs), whereas an issue is
direction-neutral (e.g., costs). The goal is to reach a compromise solution, and usually such a
solution is found. Without a negotiated compromise solution, many or all of the parties may end
up in a situation that is worse than the possible negotiated solution.
The process and outcome of group negotiations has long been a topic of considerable research
interest (Druckman, 1977; Bazerman, 2002; Bazerman and Neale, 1983; Dwyer, 1984; Neale and
Bazerman, 1985; Kersten and Szapiro, 1986; Rubin et al., 1994; Shakun, 1981, 1988; Sycara, 1991;
Zartman and Berman, 1982). Nunamaker et al. (1991) remark that ‘‘. . . negotiation includes
resolving both conflicts of interest between conflicting parties (i.e., ‘hard,’ ‘distributive’ or ‘win–
lose’ negotiations) and conflicts of viewpoint between essentially friendly parties (i.e., ‘soft,’
‘integrative’ or ‘win–win’ negotiations)’’ (1991, p. 1325). Developments in information technology
have facilitated improved methodologies both for generating options (Nunamaker et al., 1991;
DeSanctis and Gallupe, 1987), and for identifying potential agreements and resolving conflict
between the parties (Raiffa, 1982; Raiffa et al., 2002; Kersten, 1985; Jarke et al., 1987). Bazerman
(2002, Ch. 7) explains how ‘‘win–win’’ negotiations can work. Much of his work is based
on earlier research by Pruitt and Rubin (1986) and Rubin et al. (1994). Among others, Rubin et al.
(1994) study ways in which settlement may be reached in the case of a stalemate in the
negotiations.
In a group decision problem, a group of n individuals, for instance a committee, makes decisions
based on different proposals (see, e.g., Huber, 1984). DeSanctis and Gallupe (1987) describe the
group decision support area, provide a comprehensive review of the foundations of research in the
group decision support area and lay out potential areas of research. Hwang and Lin (1987) give
an extensive review of methodologies that have been used in the group decision support
area, including numerous references. Much of the group decision support research focuses on
structuring the group decision process, facilitating communication and group interaction
(Nunamaker et al., 1988).
Over the past several decades, these types of problems have been investigated in such fields
as applied mathematics, operations research, management and psychology. Game theory (Von
Neumann and Morgenstern, 1944) has often been used as the modeling framework for bargaining
and negotiation problems (Luce and Raiffa, 1957; Rapoport, 1974; Shakun, 1988). Utility analysis
(decision analysis) and social welfare analysis have been applied successfully to group decision
problems (Keeney and Kirkwood, 1975; Keeney, 1976; Keeney and Raiffa, 1976; Raiffa, 1982;
Raiffa et al., 2002; Hwang and Lin, 1987; Shakun, 1988).
It is natural that several studies have suggested the extension of multi-criteria decision
methodologies from the case of one single decision maker to that of multiple decision makers, in
the context of bargaining, negotiations and group decision problems (Yu, 1973, 1985; Dyer and
Sarin, 1979; Freimer and Yu, 1976; Wendell, 1978; Raiffa, 1982; Raiffa et al., 2002; Shakun, 1988;
Kersten, 1985, 1988; Korhonen et al., 1986; Ehtamo et al., 1999, 2001). The aim of these studies is
to develop decision support systems that aid the negotiators (decision makers) in finding potential
settlements that achieve a Pareto optimal final solution and minimize the negotiation costs.
A solution is Pareto optimal (non-dominated) if no other feasible solution exists such that
any of the parties can improve their status without negatively affecting at least one other party.
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The set of non-dominated solutions is also called the Pareto set or Pareto frontier. In the
negotiation context, the Pareto frontier is also called the contract curve (Raiffa, 1982). The
rationale for focusing on the Pareto frontier is that accepting a dominated solution as the final
settlement would imply that at least one party could increase its value (utility) without harming
any other party.
Most multi-criteria negotiation support systems developed to date assume that the parties
involved are to some extent cooperative. We consider negotiations to be cooperative if the parties
are willing to make tradeoffs. Systems that deal explicitly with non-cooperative negotiations
include ONDINE II (Goeltner, 1987; Nyhart and Goeltner, 1987), which is based on value
functions, and NEGO (Kersten, 1985), in which multiple objective linear programming models
are used to examine tradeoffs between Pareto optimal solutions. Because our proposed method
assumes that the negotiation parties are cooperative, we will not discuss the non-cooperative
models in further detail, and focus our discussion on previous research within a cooperative multi-
criteria negotiation setting.
Discrete alternative methods for cooperative multi-criteria negotiation support include Co-op
(Bui, 1987), SCDAS (Lewandowski, 1989; Lewandowski and Wierzbicki, 1987) and MEDIATOR
(Jarke et al., 1987). MEDIATOR uses concepts of multi-attribute utility theory to suggest a
potential settlement of the negotiations and seeks a compromise solution by combining the
individual value functions of each party. Gupta and Livne (1988) propose the use of reference
outcomes to resolve conflict situations.
Raiffa (1982, pp. 160–165) describes a method that uses the Pareto optimal frontier to resolve
two-party, multiple-issue negotiation problems. In Raiffa’s method, first the marginal value
functions are assessed for each party on each issue, and relative importance weights for each issue
are determined for each party. Next, in order to find the Pareto frontier, the joint evaluations
(values) of various potential contracts are calculated, after which the weighted sum of all parties’
values is optimized for various combinations of relative weights. As it is impossible to achieve
joint gains in value by deviating from the Pareto frontier, Raiffa subsequently limits the search for
a negotiated agreement to solutions on this frontier.
Korhonen et al. (1986) develop an algorithm that first uses the Zionts and Wallenius (1976,
1983) approach to find the most preferred Pareto optimal solution for each single decision maker,
and then uses the proxy value functions ( PUFs) of all decision makers as objective functions
to solve the multi-party problem. The most preferred group solution is determined by asking
the group members to respond to pairwise comparison questions. Kersten (1988) proposes a
methodology based on artificial intelligence techniques designed to aid one party in multi-party
negotiations.
The user-interactive and dynamic Nadir Ordinal Ranking Approach (NORA) system (Teich,
1991; Teich and Kuula, 1989) is designed for two-party negotiations. Rather than utilizing formal
value functions, NORA relies on ‘‘quick-and-dirty’’ methods to approximate each party’s
preference structure. Resource Allocation Multiple Objective Negotiation Approach (RAMO-
NA), another system developed by these authors (Teich, 1991; Kuula, 1993, 1998; Teich et al.,
1995), is designed for two-party multiple issue negotiations. RAMONA first reduces the number
of issues from many to one by determining the contract curve, after which subsequently a
compromise solution is selected from the contract curve. The assumptions underlying RAMONA
are that the parties are diametrically opposed on each issue, so that if one party seeks to maximize
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a given criterion, the other seeks to minimize this criterion; that the ‘‘minimizing’’ (‘‘maximizing’’)
party seeks to minimize (maximize) a differentiable quasi-convex (concave) value function, so that
the indifference curves of both parties have negative slopes throughout; and that a contract curve
can be constructed at the points of tangency of the indifference curves.
Ehtamo et al. (1996, 1999) propose methods for generating efficient agreements in two-party
negotiations in which first an individual multi-criteria decision problem is solved separately for
each decision maker, after which a mediator assists in coordinating a solution process with the
purpose of ultimately reaching a Pareto optimal solution that is acceptable to both parties.
Heiskanen et al. (2001) extend a variant of these methods to the case of multi-party negotiations.
In their procedure, decision makers indicate their most preferred points on different sets of linear
constraints, ultimately generating either one Pareto optimal solution or an approximation to the
Pareto frontier. In the latter situation, further negotiation is required to achieve a Pareto optimal
solution. Ehtamo and Hämäläinen (2001) develop two interactive methods, one based on finding
jointly improving directions and the other on making constraint proposals to the parties. Our
algorithm is similar in spirit to Heiskanen et al. (2001) and Ehtamo and Hämäläinen (2001), but
the nature of the interactive process in our approach is quite different, as it uses aspiration levels
and multi-criteria interior point optimization methods to facilitate the process of naturally
converging to a Pareto optimal solution.
3. Single decision maker multi-objective programming (MOP) formulations

3.1. Single decision maker MOP problem
A single decision maker MOP problem can be formulated as follows:
Maximize z ¼ fðxÞ
subject to : x 2 X;
where X <n is the feasible region in decision space and x is an n 1 vector of decision variables.
X can be defined in various different ways, for instance as a set of discrete alternatives or as a set
of mathematical constraints. In our formulation, X is a convex set. The outcome space is defined
by Z ¼ ffðxÞjx 2 X g <k , where z 5 f(x)T 5 ( f1(x), f2(x), . . ., fk(x)) is the k 1 criterion vector
associated with x. One important concept that plays an important role in both MOP and
negotiation analysis is non-dominance. A vector ^z 2 Z is said to be non-dominated if and only if
there does not exist another zAZ (z 6¼ ^z) such that z*^z.
3.2. Single decision maker multi-objective linear programming (MOLP) problem
We will consider MOLP problems only. The single decision maker MOLP problem may be stated
as follows:
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Problem I:
Maximize z ¼ Cx;
Subject to Ax ¼ b;
x*0;
where C is a q n matrix such that the ith objective function equals zi ¼ fi ðxÞ ¼ cTi x; cTi is the ith
row of C, A is the m n matrix of technical coefficients, and b is the m 1 vector of right-hand
side values of the constraints. In Problem I, any inequality constraints in the original model
formulation have been converted to equalities by including slack and surplus variables. These
slack and surplus variables are included in x. In the remainder of this paper, we will assume that
x contains true decision variables only. If x contains slack and surplus variables as well, the
interpretation and dimensions of x should be modified accordingly.
3.3. Single decision maker augmented MOLP formulation
The mathematics of our negotiation support system are based on the single decision maker
interior point MOLP formulation by Arbel (1993) and Arbel and Korhonen (1996a, 1996b).
Since its inception by Karmarkar (1984), hundreds of articles have been written about the interior
point method. Reviews of the research on interior point methods have been published by, e.g.,
Arbel (1993), Cheng et al. (1989) and Megiddo (1989). In his bibliography on the topic, Kranich
(1991) lists over 1200 papers related to interior point methods.
The formulation by Arbel (1983) and Arbel and Korhonen (1996a, 1996b) in Problem II below
is an augmented version of Problem I. Let xT be defined by xT ¼ ðxT ; e; vT Þ, v 5 g1Cx1er,
where r denotes a q 1 scaling vector of the objective functions (not to be confused with
preference weights), e a scalar and g a q 1 vector of aspiration levels for the objectives. Without
loss of generality, in this paper all scaling factors are taken to be equal, so that r ¼ 1q1 .
Moreover, let h be a (n1q11) 1 vector with all zero elements, except for the (n11)st position,
T
which equals unity,
so that hx ¼ e,let b ¼ ðbT ; gT Þ, and define A as an (m1q)(n1q11) matrix of
A 0m1 0mq
the form A ¼ .
C r Iqq
The augmented formulation is given as Problem II (Arbel and Korhonen, 1996a):
Problem II:
Minimize z ¼ h
x

Ax¼ b;
Subject to : *0;
x
4. Our negotiation support system: formulation and algorithm

4.1. Multi-party augmented MOLP formulation
We extend Problem II to a constrained negotiation support framework for p-party negotiations

that facilitates the negotiation parties in structuring and solving their negotiation problem. In our
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framework, it is essential that no external body exists that can force the parties to a settlement.
In other words, it is assumed that the parties are willing to cooperate in finding an acceptable
compromise solution. The incentive for negotiating a settlement is that, if the negotiations fail, a
given party may end up in a situation that is worse than the possible negotiated solution.
We stress that our negotiations method can be appropriate only if all parties share the same set
of objectives, i.e., all parties use the same objectives in their decision process. Likewise, all parties
face the same set of feasible solutions. These model parameters may be agreed upon through
preliminary verbal discussions, but in the end the objectives and constraints must take the form
of mathematical expressions. The relative importance of the different criteria may vary by party.
Thus, within our modeling framework the formulation of the constrained multi-criteria
negotiation problem is conceptually similar to the above MOP problem.
All efficient solutions of a negotiation problem are located on the Pareto frontier. The purpose
of the negotiations considered in our paper is to find a solution located on the contract curve that
all parties can agree on. Some previously proposed MOP methods for the negotiation problem
limited the search for a compromise solution to solutions on the contract curve (Korhonen et al.,
1986). However, in practice this may be problematic. Once the parties have found some solution
on the contract curve, it may be difficult to move from that point to another point on the contract
curve, as doing so would imply that at least one of the parties would be worse off as a result. The
result may be that the negotiations end in a ‘‘stalemate,’’ with at least one party refusing to move
from its current position.
Other researchers propose to present the parties with solutions that are not located on the
contract curve, using a ‘‘win–win’’ strategy, starting the negotiations at a solution that is poor
(strictly dominated) for all parties (Raiffa, 1982). The negotiations proceed interactively, by
presenting the parties with a sequence of solutions that are better for all parties than previous
solutions. This process continues until a solution on the contract curve is reached. The difference
in approach between a Pareto tradeoff analysis with sacrifices and a ‘‘win–win’’ procedure that
never involves sacrificing one objective for another basically boils down to a gain–loss framing
effect (Hastie and Dawes, 2001). In previous research papers, the nature of the ‘‘win–win’’ strategy
has been ad hoc, and it is not clear how to generate improved solutions in the negotiation process.
In other words, these methods do not have a systematic way of identifying a solution path that
results in a Pareto optimal compromise solution that is acceptable to all parties.
The negotiation literature provides two underlying reasons for the ‘‘win–win’’ negotiation: (1)
intervention of a powerful third party as proposed by Fisher and Ury (1981) and discussed by
Raiffa (1982); the third party has powers to force or persuade the negotiators to use a single
negotiation text (SNT); and (2) negotiation which involves learning of the opponents’ interests
and discovery of the feasible alternatives proposed by Fisher and Ury (1981).
In our paper, we introduce a mathematically supported user-interactive procedure for
identifying win–win solutions, based on the aspiration levels of each party, which uses the
feedback from the parties to identify an optimal solution path, resulting in a compromise solution
on or near the Pareto frontier. In the kind of negotiation situation to which our approach may
be appropriate, the parties do not know or are not explicitly aware of the set of all feasible
solutions and the corresponding objective values; thus the learning effect is a motivating factor
rendering a ‘‘win–win’’ approach reasonable. In the current paper, we focus on the algorithmic
development of the method, its conceptual underpinning and a numerical example. In a
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subsequent paper, we will use experiments to address user-related issues and the effectiveness of
our method in practice.
Our negotiation system interactively presents the p parties with improved solutions that are
based on aspiration level vectors on the objectives provided by the parties. While Problem II uses
a single aspiration vector g, in the multi-party case the search for mutually acceptable improved
solutions is guided by some function of the parties’ individual aspiration vectors g1 ; . . . ; gp . The
feasible region in decision space, defined by the mathematical constraints, can be restricted by
both constraints that are common to all parties and constraints that each individual party has
formulated separately.
The starting position in the negotiations is very important. A good starting point should be
‘‘fair’’ to all parties, and offer ample opportunity for joint gain. The interior point algorithm
we employ is flexible in that it enables us to use the SNT (Fisher, 1978), the best alternatives to
negotiated agreement (BATNA) (Fisher and Ury, 1981, Raiffa, 1982) or any other concept that
starts the negotiation process at a feasible, strictly dominated initial solution. BATNA has two
possible interpretations. In one interpretation, BATNA may be directly mapped onto the decision
space; it has the same attributes as those considered in the negotiation. In the second
interpretation, BATNA is an alternative that has different attributes. The former interpretation
appears suitable in the case of our method.
Fisher (1978) suggests an analytical mediation approach where a mediator presents an SNT.
The SNT may be provided by an arbitrator, or may reflect the current situation. The SNT is
usually ‘‘poor’’ for all parties, and through negotiations it is possible to identify solutions that are
preferred by all parties.
As it is desirable to start the negotiations at a point that each party prefers to the alternative of
no negotiated agreement, Fisher and Ury (1981) propose to use the BATNA points of the parties,
rather than the SNT solution. The BATNA solution for a given party is the best individual
solution this party can achieve if the negotiations fail. Each party has a different BATNA
solution, so that in the BATNA approach each party starts the negotiations from a different initial
solution. Like the SNT, the BATNA solution is usually dominated. Whereas the BATNA
solution is always feasible, this may not be the case for an SNT solution. From the BATNA
solution, the parties negotiate their way toward a solution on the Pareto frontier. A third possible
dominated starting point of the negotiations is the nadir solution, which is the combination of the
worst Pareto optimal values of each individual criterion. As with the SNT and BATNA solutions,
starting the negotiations at the nadir point facilitates a win–win strategy.
Figure 1 illustrates a negotiation problem with two parties that both seek to maximize the two
criteria f1(x) and f2(x), with most preferred feasible solutions D and F for Parties 1 and 2,
respectively. The Pareto frontier consists of the piece-wise linear boundary of the feasible set
between points D and E. The method of Korhonen et al. (1986) starts at a Pareto optimal
solution, and the search for a compromise solution is limited to movements along the Pareto
frontier. Alternatively, starting at their BATNA solutions (for instance, points A and B in Fig. 1),
the parties can use a win–win strategy to proceed iteratively toward a compromise solution on the
Pareto frontier. In Fig. 1, the solution paths for both parties are indicated by the lines emanating
from A and B, respectively, resulting in the Pareto optimal compromise solution C. Once a
Pareto-optimal point has been located, the solution cannot change without a sacrifice on the part
of at least one of the parties.
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Objective 2
Most Preferred Solution, Party 2

E F
.C
Party 2
D
B*
*
A
Party 1
Objective 1
Fig. 1. Convergence to single (almost) Pareto solution.
In our algorithm, the overall direction of a given party’s solution

P path is based on the vector of
the mean aspiration levels for all parties combined, gmean ¼ i gi =p. For instance, in Problem II, g
is replaced by gmean . For a given set of aspiration vectors, the procedure gradually steers the
solution path of each party to a single compromise solution. Any party is allowed to change its
aspiration level vector at any point of the negotiation process. Typically, a change in one or more
aspiration level vectors will result in a modified direction of the solution path of intermediate
compromise solutions presented to the parties.
4.2. The interactive search algorithm
We modify the notation used in Problems I and II to reflect that we are now dealing with the case
of multiple parties. A detailed explanation of the symbols used in this paper is given in Table 1.
The purpose of our negotiation support method is to explore how the various parties can
improve their solution (in terms of the objective function values fi) simultaneously, by moving
toward their respective aspiration level vectors. Because the aspiration level vectors of each party
are typically different, our algorithm determines a ‘‘mean’’ aspiration vector, which in turn guides
the direction of improvement. Because the resulting solution direction improves the situation of
each party, there should not be overwhelming opposition to the revised solution at the next step.
What may happen is that a given party discerns solution directions that are more attractive than
the current one, in which case this party will adjust its aspiration level vector accordingly, after
which a revised solution direction is determined for the next step.
At the start of a global iteration, an updated mean aspiration vector is calculated, based on the
current aspiration vectors of the individual parties. This generally implies a modified direction of
the solution path, reflecting the revised preference information. Subsequently, a fresh round of
local iterations is initiated. Within a loop of local iterations, the aspiration vectors remain
unchanged, and at each local iteration the system presents the parties an improved solution, based
on their current aspiration vectors. Therefore, within a loop of local iterations the direction of the
search path remains the same. A local loop terminates when either a pre-specified maximum
number of iterations is reached, or one of the parties wishes to revise its aspiration vector. The
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Table 1
Notations
k Global iteration counter
p Number of negotiation parties
q Number of criteria
n Number of decision variables
rsk Local counter of the number of steps taken in the same direction, within local iteration sk
rsk ; max Maximum number of steps to be taken in the same direction, within local iteration sk
sk Local iteration counter, within global loop k
sk; max Maximum number of local iterations within global iteration sk
e Scalar variable to be minimized in the augmented formulation ðe ¼ hxÞ
a, r Step size scalars used in the interior point procedure
A m n matrix of technical coefficients (MOP and MOLP formulations)
A (m1q) (n1q11) augmented coefficient matrix
b m dimensional vector of right-hand side values
b m1q dimensional augmented vector of right-hand side values
k
bi n1q11 dimensional augmented right-hand side vector for party i, global iteration k
C q n matrix of objective function coefficients (MOP and MOLP formulations)
cTi ith row of C (MOP and MOLP formulations)
Djoint Diagonal (n1q11) (n1q11) matrix with xTjoint on the diagonal
f(x) q dimensional criterion vector (MOP and MOLP formulations)
fðxk; i
sk
Þ q dimensional criterion vector for party i, at local iteration sk of global iteration k
g q dimensional aspiration level vector (single decision maker MOLP)
gi q dimensional aspiration level vector, party i
gk;
i
sk q dimensional aspiration level vector, party i, at local iteration sk of global iteration k
gjoint q dimensional joint aspiration level vector at the end of the iterative process
gmean q dimensional vector of the mean aspiration levels for all parties combined
gki q dimensional aspiration level, party i, at the beginning of local iteration k
gkmean q dimensional mean aspiration level for all parties combined, at the beginning of local iteration k
gk;
mean
sk q dimensional mean aspiration level vector, for all parties combined, at local iteration sk of global iteration k
k; sk Relative duality gap for party i, at global iteration k, local iteration sk
Gi
h n1q11 dimensional vector with all zeros, except for the (n11)st position, which equals 1
r q dimensional scaling vector of the objective functions
v q dimensional reduced cost vector
vk;
i
sk q dimensional reduced cost vector for party i, at local iteration sk of global iteration k
vjoint q dimensional joint reduced cost vector at the end of the iterative process
x n dimensional solution vector in decision space (MOP, MOLP formulations)
xk;i
sk n dimensional solution vector in decision space for party i, at local iteration sk of global iteration k
k; sk n dimensional solution vector in decision space for party i, at step rsk of local iteration sk of global iteration k
xi ðrsk Þ
xjoint n dimensional joint solution vector in decision space at the end of the iterative process
x n1q11 dimensional augmented vector of decision variables
xjoint n1q11 dimensional augmented joint solution vector in decision space at the end of the iterative process
xboundary n dimensional proposed solution vector in decision space, projected onto Pareto frontier from xjoint
xk;i
sk n1q11 dimensional augmented solution vector in decision space for party i, at local iteration sk of global iteration k
xboundary n1q11 proposed augmented solution in decision space, projected onto the Pareto frontier from xjoint
yi n1q11 dimensional vector of dual variables, party i
yjoint n1q11 dimensional joint vector of dual variables at the end of the iterative process
z q dimensional criterion vector (MOP and MOLP formulations)
z Objective function variable of augmented single decision maker MOLP ( Problem II)
dk;
xi
sk n1q11 dimensional step direction vector of the solution path, party i, at local iteration sk of global iteration k
dx, joint n1q11 dimensional joint step direction vector at the end of the iterative process
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latter indicates that the direction of improvement needs to be adjusted. A new global iteration is
started as soon as a loop of local iterations has ended.
The algorithm is presented next:
Global iterations
Step 0: Let k 5 0, sl 5 0, for all l. Determine p strictly interior, primal starting solution vectors
x00 00 00
i > 0, i 5 1, . . ., p, that satisfy Axi ¼ b, and xi *0, for all i. Go to Step 1.
0
Step 1: Determine the initial aspiration vectorsh gi , i 5 1, .i. ., p, specify s0, max and calculate
P 0 00 T 00 T T
gmean ¼ i gi =p. Initialize ðxi Þ ¼ ðxi Þ ; e; ðv00
0
i Þ > 0, where v00 0 00
i ¼ gi þ Cxi þ er
h i
0
and ðbi ÞT ¼ bT ; ðg0i ÞT . Go to Step 2.
Step 2: If k40, then let k: 5 k11, sk 5 0, and go to Step 3. Else (i.e., if k 5 0) go to Step 4.
Step 3: Ask the parties for new aspiration level vectors gki , i 5 1, . . ., p. Determine
P
gkmean ¼ i gki =p; xk;
i
sk
; vk;
i
sk
; i ¼ 1; . . . ; p. Recalculate the duality gaps Gk;
i
sk
for each i.
k k1 k; sk
If there exists an i such that gi 6¼ gi and the revised Gi is not ‘‘small’’ for any i, then
specify sk, max for the current global iteration k, and go to Step 4. If gki ¼ gk1 i , for all i, or
if at least one of the revised Gk; i
sk
is ‘‘small,’’ then go to Step 5.
Step 4: Complete the loop of local iterations in Steps 4a–4e below.
Calculating a proposed Pareto optimal compromise solution

P
Step 5: Calculate the joint aspiration level vector gjoint ¼ i gk; i
sk
=p h and the joint
i solution
P k; sk T T T
xjoint ¼ i xi =p. Determine the augmented vectors xjoint ¼ xjoint ; e; vjoint > 0 and
h i
T
bjoint ¼ bTjoint ; gTjoint , where vjoint ¼ gjoint þ Cxjoint þ er. Go to Step 6.
h i
Step 6: Let Djoint ¼ Diag xTjoint ; . . . ; xTjoint . Solve for the dual vector yjoint, such that
T T
(AD2joint A Þyjoint ¼ AD2joint h. Determine the step direction vector dx; joint ¼ D2joint ðh A yjoint Þ

and the step size factor a ¼ Minimumj xjoint; j =dx; joint; j , where xTjoint; j and dx, joint, j are
the jth components of xjoint and dx, joint, respectively, 14j4n1q11. The Pareto optimal
compromise solution xboundary is determined as xboundary ¼ xjoint þ a1 dx; joint , and the
corresponding optimal solution in criterion space fðxk; i
sk
Þ.
Testing of the end condition

Step 7: If at least one of the negotiating parties is not satisfied with fðxboundary Þ, go to Step 7a.
Else, go to Step 7b.
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Step 7a: There exists a conflict that may not be resolved using the current methodology
(stalemate).
Step 7b: All parties are satisfied with the current solution. If all of the most recent vectors xk; i
sk
,
i 5 1, . . ., p, are non-dominated, xboundary is the final compromise solution and the
negotiation process ends. If at least one of the most recently calculated solution vectors
xk;
i
sk
, i 5 1, . . ., p, is strictly dominated, go to Step 7c.
Step 7c: If at least one vector xk; i
sk
, i 5 1, . . ., p, is strictly dominated, but by less than a ‘‘small’’
distance from the Pareto optimal set, then the compromise solution xjoint is ‘‘close’’ to
being non-dominated; in this case xboundary is the final compromise solution.
If at least one vector xk; i
sk
, i 5 1, . . ., p, is more than a ‘‘small’’ distance from the Pareto
optimal set, then propose xboundary to all parties. If at least one of the parties is not
satisfied with fðxboundary Þ, go to Step 7a. Else, xboundary is the final compromise solution
and the negotiation process ends.
The procedure terminates if all parties accept this solution as the final solution. Otherwise, either
re-start the algorithm with the most recently calculated individual solutions as starting points of a
new negotiation session using our algorithm, or resort to alternative methods for arriving at a
most preferred compromise solution in the cone of improvement defined by the current set of
solutions.
Local iterations
Step 4a: Let gk; sk k
mean ¼ gmean .
k; sk k; sk 1
Step 4b: Calculate ghi ¼ ðgmean þ gkiiÞ=2 (skX1). This is the ‘‘means of means step.’’ Initialize
sk T sk T sk T k
ðxk;
i Þ ¼ ðxk; i Þ ; e; ðvk;i Þ > 0, where vk; i
sk
¼ gk; i
sk
þ Cxk; i
sk
þ er and ðbi ÞT ¼
h i
k T
bT ; ðgk;s
i Þ . Go to Step 4c.
h i
Step 4c: Define the scaling matrix Dk; i
sk
through Dk;
i
sk
¼ Diag xk; i
sk
; . . . ; xk;i
sk
, and solve for the
h T
i
sk 2 sk 2
dual vectors yi for each i, such that AðDk; i Þ A yi ¼ AðDk; i Þ h. The step direction
sk 2 T
vector dxi is given by dxi ¼ ðDk; i Þ ðh A yi Þ, i 5 1, . . ., p. Go to Step 4d.
Step 4d: Specify rsk ; max . Let rsk ¼ 1. While rsk )rsk ; max , repeat the following: evaluate the next
local step through xk; i
sk
ðrsk þ 1Þ ¼ xk;i
sk
ðrnsk Þ þ radxi , ofor each i, where a and r are
positive step size factors, a ¼ Minimumj xk; sk
ij =dxij , for all dxij40, 14j4n1q11,
and xk; sk k; sk
ij , dxij are the jth components of xi and dxi , respectively. Let xijk; sk þ1 ¼
xk; sk
ij ðrsk ; max Þ. Let rsk :¼ rsk þ 1. Go to Step 4e.
Step 4e: For each i separately, evaluate the relative duality gap Gik; sk þ1 ¼
T
jhT xijk; sk þ1 b yi j= jj1:0 þ hT xijk; sk þ1 jj . If the problem is primal feasible and the duality
gaps Gik; sk þ1 are ‘‘small’’ for at least one i, or if sk 5 sk, max, then go to Step 2. Else (i.e.,
Gik; sk þ1 not ‘‘small’’ for any i, and skosk, max) let sk: 5 sk11, and go to Step 4c.
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In Step 0, p feasible, interior point solutions are generated (perhaps SNT, BATNA, nadir
vectors). The global and local iteration counters are initialized to k 5 0 and sl 5 0, for all l,
respectively. In Step 1, each party specifies its initial aspiration vector, and the initial mean
aspiration vector and the initial augmented vectors are determined. In Step 2, one immediately
proceeds to the loop of local iterations in Step 4 if no global iteration has been completed yet.
Otherwise, Step 3 needs to be completed, in which the aspiration levels are updated. If none of the
parties choose to modify their aspiration levels at this point, or if after updating the aspiration
levels the duality gap is ‘‘small’’ for at least one party, indicating that this party has reached a
Pareto optimal solution, the negotiation process terminates and moves to Step 5 in order to
determine the joint vectors. If at least one party chooses to modify its aspiration levels and the
current solution is strictly dominated for all parties (i.e., the duality gap Gk; i
sk
is not ‘‘small’’ for
any i), the process proceeds with the loop of local iterations in Step 4.
In the loop of local iterations in Step 4, the ‘‘mean of means’’ aspiration vectors, the augmented
vectors and the step direction vector are updated in Steps 4a–c. The aspiration vector and the step
direction vector will remain unchanged during the current loop of local iterations. In Step 4c, the
step direction vector defines the general search direction in the current local loop.
The magnitude of the step in the current direction is determined in Step 4d. The duality gap
Gik; sk þ1 , which measures how close each party is removed from the Pareto frontier, is updated in
Step 4e. If in Step 4e either the pre-specified maximum number of local iterations has been reached
or one of the parties has reached a solution ‘‘close’’ to the Pareto frontier, then the current global
iteration comes to an end and we return to Step 2 for the next global iteration. Otherwise, we
continue with Step 4c.
Once the iterative process in Steps 1–4 has concluded, the proposed Pareto optimal compromise
solution xboundary is calculated in Steps 5–6. Depending on the characteristics of xjoint and the
extent to which the parties are satisfied with xboundary, the projection of xjoint onto the Pareto
frontier, the procedure may result in one of several different end situations.
One issue of interest is whether there is a relationship between a party’s aspiration levels and the
step size for this party. Different step-sizes for different negotiation parties may address the
potential problem when only one party reaches a Pareto optimal solution. This issue should be
addressed in future experimental studies.
Figures 1–3 show examples of possible solution paths for the two-party, two-criteria case. In
Fig. 1, the parties converge to a solution C that either lies on the Pareto frontier
(C 5 xjoint 5 xboundary) or is slightly dominated, i.e., ‘‘very close’’ to the Pareto frontier (‘‘small’’
duality gap for xjoint). If C 5 xjoint is slightly dominated, it is reasonable that the parties will agree
to project this solution to a compromise solution xboundary on the Pareto frontier in a win–win
way, i.e., in a way that is advantageous to both parties.
Figure 2 exemplifies the situation where the parties arrive at a single solution G 5 xjoint that has
a large duality gap for both parties and therefore is a clearly dominated solution not ‘‘close’’ to the
Pareto frontier. In this situation, both parties can achieve further gains, for example by accepting
the projection H 5 xboundary of G onto the Pareto frontier as a compromise solution, by
continuing the negotiation process from either G or H, or by switching to alternative conflict
resolution methods.
In Fig. 3, the individual parties do not reach a mutually agreeable solution, and end up at
separate points I and J on the Pareto frontier. In this situation, a win–win strategy is no longer
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Objective 2

E
F
H
G
Party 2
D
B*
A*
Party 1
Objective 1
Fig. 2. Convergence to dominated solution.
Objective 2
E F
J
I
* D
B *
A
Objective 1
Fig. 3. No convergence, separate (almost) Pareto solutions.
feasible, and our procedure can no longer be used. Hence, at this point alternative negotiation
methods should be used that are designed for an analysis of tradeoffs along the Pareto frontier
between the solutions of the individual parties (the piecewise linear frontier between I and J). If
such a method is not successfully used, the negotiations end up in a stalemate. In certain
situations, one may be able to facilitate convergence to a single mutually agreeable solution on
the Pareto frontier by restricting the revised aspiration levels; however, such restrictions are useful
only if they do not have an adverse effect on the willingness of the parties to continue their
participation in the process.
It is also possible that some parties end up at the Pareto frontier, while others do not. If this
happens, then those parties on the Pareto frontier may have no incentive to move, because any
change would require a tradeoff between objectives for these parties, and each party already on
the Pareto frontier would need to sacrifice with respect to at least one objective function value. In
this case xboundary may not be acceptable and the negotiation process may stall.
Generally, if some parties are not satisfied with xboundary and the corresponding objective
function values fðxboundary Þ, then our methodology has been unable to facilitate a negotiated
solution, so that alternative conflict resolution methods need to be explored, or the problem needs
to be reformulated.
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5. Illustration
To demonstrate our proposed approach, consider the following negotiation problem, with three
decision variables x 5 (x1, x2, x3)T, three criteria f 5 (f1, f2, f3)T, four feasibility constraints and
three parties (i 5 1, 2, 3); each party seeks to maximize all criteria.
Maximize f1 ¼ 7x1 þ 4x2 þ 9x3

Maximize f2 ¼ 2x1 þ 6x2 þ 2x3
Maximize f3 ¼ 6x1 þ 4x2 þ x3
Subject to
3x1 þ2x2 þ 3x3 )18
x1 þ 2x2 þ x3 )10
9x1 þ 20x2 þ 7x3 )96
7x1 þ 20x2 þ 9x3 )96
xi *0; for all i:
In our illustration, we exemplify how the solution path evolves during three global iterations
(k 5 0, 1, 2), with s0 5 3, s1 5 2, s2 5 3 local iterations, and rs0 5 rs1 5 rs2 5 5. As shown in Table 2,
the strictly dominated feasible starting points for the three parties in decision space are
T T T
xoo oo oo
1 ¼ ð1; 1; 1Þ , x2 ¼ ð0:5; 2; 0:5Þ , x3 ¼ ð1:5; 1; 0:5Þ , with corresponding initial objective
T T T
function vectors f oo oo oo
1 ¼ ð20; 10; 11Þ , f 2 ¼ ð15; 14; 11:5Þ , f 3 ¼ ð19; 11; 13:5Þ . These initial
solutions may reflect the BATNA solutions of each party, but as long as these are strictly
dominated and exhibit significant potential improvement for all parties involved, any set of
starting points can be used to generate a path of win–win solutions.
Table 2 also provides the initial and revised aspiration vectors gki for each party i. As outlined in
the algorithm introduced in Section 4.2, a party can adjust its aspiration vectors at any time during
the interactive negotiation process. In our example, after their initialization (k 5 0) the aspiration
level vectors are adjusted twice: once at the beginning of each new global iteration (k 5 1, 2). For
T
instance, the initial aspiration level vector for Party 2 equals g00 2 ¼ ð46; 35; 26Þ , and the modified
aspiration vector for Party 3 at the start of global iteration k 5 2 is g3 ¼ ð46; 24; 31ÞT . The
20
aspiration levels are not changed within a loop of local iterations (i.e., while k remains the same,
and sk is incremented). In our example problem, within a global run, for each party up to five
steps are taken in the same direction dxi , after which the ‘‘means of means’’ step is invoked and the
direction dxi is revised (without adjusting the aspiration levels). At any step, the parties are asked
if the current direction of improvement is acceptable. Of course, in a real application the parties
can modify their aspiration levels at any time during the interactive process.
Figure 4 shows the progression of the value of x3 toward the compromise solution in the
intermediate solutions for each party, as the negotiation process progresses. At the very left of the
graph, x00 00
3 ¼ 1 for Party 1, whereas x3 ¼ 0:5 for Parties 2 and 3. At the very right, Fig. 4 shows
the final values of x3 for Parties 1, 2 and 3: 1.76, 1.14 and 0.44, respectively. In between, we have a
maximum of s0 rs01s1 rs11s2 rs2 5 (31213) 5 5 40 iterations. However, in our example
one of the parties indicates an (intermediate) desire to modify his/her aspiration vector after the
first iteration within s0 5 3, s1 5 2 and s2 5 3, so that we have a total of 1116111 5 28 iterations.
The breaks in the pattern of x3 at the end of the first global iteration (k 5 0) at iteration 11 and the
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Table 2
Solutions, example
Utopia Objective Function Values
Objective f1 f2 f3

Utopia value 54 30 36
Initial solution
Decision variables Objective function values
Party i xoo
1 xoo
2 xoo
3 f oo
1 f oo
1 f oo
1
Party 1 1 1 1 20 10 11
Party 2 0.5 2 0.5 15 14 11.5
Party 3 1.5 1 0.5 19 11 13.5
Aspiration levels of objectives
Global iteration k Party i ðgki ÞT
0 Party 1 (60, 15, 18)

Party 2 (46, 35, 26)
Party 3 (40, 20, 38)
1 Party 1 (55, 20, 20)
Party 2 (48, 34, 28)
Party 3 (45, 23, 34)
2 Party 1 (51, 27, 20)
Party 2 (49, 33, 29)
Party 3 (46, 24, 31)
Intermediate and final solutions
Decision variables Objective function values

End of global Party i
iteration k xk;
1
sk
xk;
2
sk
xk;
3
sk
f k;
1
sk
f k;
2
sk
f k;
3
sk
k50 Party 1 1.59 1.56 1.31 31.61 15.63 18.09

Party 2 0.87 2.97 0.85 26.84 21.50 18.42
Party 3 2.94 1.42 0.47 31.86 15.68 24.91
k51 Party 1 2.07 1.56 1.76 37.28 17.19 20.70
Party 2 1.23 2.95 1.15 31.71 22.50 20.70
Party 3 3.61 1.48 0.46 35.77 17.15 28.39
k52 Party 1 2.51 1.74 1.76 40.35 19.00 23.78
Party 2 1.85 3.01 1.14 35.23 24.02 24.28
Party 3 3.89 1.75 0.44 38.18 19.13 30.75
xjoint fjoint
xjoint, 1 xjoint, 2 xjoint, 3 fjoint, 1 fjoint, 2 fjoint, 3

2.75 2.17 1.11 37.92 20.71 26.27
xboundary fboundary
xboundary, 1 xboundary, 2 xboundary, 3 fboundary, 1 fboundary, 2 fboundary, 3

2.95 2.15 1.14 39.47 21.07 27.41
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2.5
Variable values
1.5 Party 1
Party 2
1 Party 3
0.5
0
1 6 11 16 21 26
Iteration number
Fig. 4. x3 values for all the parties.
45
Objective function values
40
35
30 Party 1
25
Party 2
20
15 Party 3
10
5
0
1 5 9 13 17 21 25
Itaration number
Fig. 5. Objective 1 for all parties.
end of the second global iteration (k 5 1) at iteration 17 are due to the fact that at these stages of
the process the aspiration vectors are revised.
Figure 5 shows the evolution and convergence of objective f1 for each party during the
negotiation process. Observe that f1 continues to rise for each party throughout the negotiation
process, reflecting its ‘‘win–win’’ nature. However, the three parties do not converge in terms of
the objective value itself, indicating that, although they have each identified improved individual
solutions at the conclusion of the run of our negotiation support software, there is still some
compromise decision making left.
In our example, all objectives rise continuously during the negotiation process. The only way an
objective function value can decrease during the interactive negotiation support process occurs
when a party modifies its aspiration vector in a way that substantially alters the previous relative
criterion preferences. Of course, it is also possible that some criterion tradeoffs are called for when
projecting the final solution onto the Pareto frontier – as mentioned above, some other negotiation
support tool is needed to resolve the latter issue if this represents a conflict to the parties.
All numbers reported for our example are rounded to the second decimal. At the end of global
iteration k 5 2, the solutions x2;i
3
for Parties 1, 2 and 3 are (2.51, 1.74, 1.76)T, (1.85, 3.01, 1.14)T
T
and (3.89, 1.75, 0.44) , respectively. These solutions are strictly inside X and close to but not quite
Pareto optimal, and have not converged to a single point. Therefore, the situation is of the
type represented in Fig. 3. The x2; i
3
are next converted to xjoint 5 (2.75, 2.17, 1.11)T, with
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fjoint 5 (37.92, 20.71, 26.27)T, which of course is still dominated. xjoint projected onto the Pareto
frontier yields the proposed compromise solution in decision space xboundary 5 (2.95, 2.15, 1.14)T,
with criterion space solution fboundary 5 (39.47, 21.07, 27.41)T.
Because the three parties did not converge to a single point, it is possible that some party will
not readily accept xboundary and fboundary as a suitable compromise solution. If this is the case, the
parties may continue their negotiations (using a different negotiation support tool) using as a
starting point the projections onto the Pareto frontier (not shown in Table 2) of their individual
solutions at the end of the negotiation process xi2; 3 : (2.95, 2.02, 1.55)T, (2.09, 3.57, 0.77)T and
(3.90, 2.16, 0.44)T for Parties 1, 2 and 3, respectively, with corresponding objective function values
(42.70, 21.15, 27.34)T, (35.83, 27.14, 27.57)T and (39.88, 21.63, 32.46)T.
6. Extensions
Currently, our negotiation system is only at the prototype stage. Therefore, although the current
version of our system is interactive and fully functional, the user interface needs additional fine-
tuning before it can be used in real applications. We are currently working on such an extension.
Our general negotiation support framework can be applied to various types of decision
problems involving multiple stakeholders. Here, we sketch how our approach can be adapted to
aid in group decision situations (committee meetings, etc.). In that particular case, the algorithm
would have the following main steps:
Step 1: Start from some ‘‘poor’’ point.
Step 2: Ask each decision maker to specify his/her aspiration levels, and use a common aspiration
level vector, comprising the minimum (‘‘worst’’) values of the individual aspiration level
vectors (if you do not ask too much, you can get it!!).
Step 3: Use the common aspiration level vector as the aspiration level vector in our negotiation
support system and develop a trajectory. Halt the process as soon as the first of the
decision makers wants to stop, and proceed after specifying a new aspiration level vector.
Step 4: Discontinue the process as soon as one of the decision makers wants to stop. Generate a
Pareto optimal solution as the final solution.
This procedure is very easy to implement using the negotiation support system introduced in this
paper. We only have to determine the joint starting point for each party, and can skip the local
process in our algorithm altogether.
7. Conclusions
In this paper, we present a novel support system for solving multi-party multi-criteria negotiation
problems with linear criteria and constraints. Our approach has several advantages over previous
methods proposed for solving this type of problem. First, most other methods focus at an early
stage on Pareto optimal solutions only and require the parties to make tradeoff decisions
between the criteria, which may lead to a stalemate situation. In contrast, following Raiffa’s
recommendation (Raiffa, 1982; Raiffa et al., 2002), throughout the interactive process our method
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always proposes ‘‘win–win’’ solutions to each party. Thus, the most recent solution offered to each
party is always more preferred than the previous one, creating a positive negotiation environment
and providing an incentive to accept the proposed solution, or at least encourage each party to
continue the negotiations. Second, confidentiality of the preference information revealed by a
given party is protected and not shared with the other parties. Third, the only preference
information required from each party consists only of aspiration level vectors for the objectives.
This kind of information is easily provided by decision makers. At any point, a party has the
flexibility to modify its aspiration level vector or terminate the interactive negotiation process.
Other negotiation methods that facilitate ‘‘win–win’’ situations, such as Heiskanen et al. (2001)
and Ehtamo et al. (2001), require comparisons of different proposed solutions at each iteration or
on making constraint proposals to the parties. Therefore, although similar in general modeling
approach (focusing on ‘‘win–win’’ scenarios), our approach differs substantially in that the
information requirement of our approach is lower, while the type of information needed is very
easily provided and processed.
One key attractive aspect, shared by our negotiation support system and that of Heiskanen
et al. (2001), is the fact that a party’s revealed preference information remains confidential and
is not shared with the other parties. This is important, because research has shown (Brams and
Taylor, 1996) that when a party is not fully aware of the preferences of the opposing parties, the
likelihood that parties will be able to benefit from adopting a strategy of deceit by misrepresenting
their preferences is greatly reduced.
The current paper focused on the concept and algorithmic development of our method and an
illustrative example with fictitious decision makers, and lays the groundwork for a follow-up
study, in which we will use controlled experiments to address the effectiveness of our method in
practice and to identify behavioral effects, studying questions such as whether our method in fact
promotes more rational decision making or irrational decision making; whether our method leads
to better decision making, more effective negotiations, or both; and how often our method tends
to result in a mutually agreeable Pareto optimal solution.
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A win–win method for multi-party negotiation support

Keywords: negotiation; group decision support; interior point methods

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3. Single decision maker multi-objective programming (MOP) formulations

A single decision maker MOP problem can be formulated as follows:

3.2. Single decision maker multi-objective linear programming (MOLP) problem

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3.3. Single decision maker augmented MOLP formulation

4. Our negotiation support system: formulation and algorithm

We extend Problem II to a constrained negotiation support framework for p-party negotiations

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Most Preferred Solution, Party 2

Fig. 1. Convergence to single (almost) Pareto solution.

In our algorithm, the overall direction of a given party’s solution

4.2. The interactive search algorithm

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Calculating a proposed Pareto optimal compromise solution

Testing of the end condition

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Most Preferred Solution, Party 2

Fig. 2. Convergence to dominated solution.

Most Preferred Solution, Party 2

Fig. 3. No convergence, separate (almost) Pareto solutions.

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Maximize f1 ¼ 7x1 þ 4x2 þ 9x3

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Objective f1 f2 f3

Decision variables Objective function values

Global iteration k Party i ðgki ÞT

0 Party 1 (60, 15, 18)

Intermediate and ﬁnal solutions

Decision variables Objective function values

k50 Party 1 1.59 1.56 1.31 31.61 15.63 18.09

xjoint, 1 xjoint, 2 xjoint, 3 fjoint, 1 fjoint, 2 fjoint, 3

xboundary, 1 xboundary, 2 xboundary, 3 fboundary, 1 fboundary, 2 fboundary, 3

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Fig. 4. x3 values for all the parties.

Fig. 5. Objective 1 for all parties.

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