Optimal agendas for sequential negotiations

Abstract

One way of negotiating multiple issues is to consider them one by one in a given order. In such sequential negotiations, a key problem for the parties is to decide in what order they will negotiate a given set of issues. This ordering is called the negotiation agenda. The agenda is a key determinant of the outcome of sequential negotiations. Thus, a utility maximizing player will want to know what agenda maximizes its utility and is therefore its optimal agenda. Against this background, we focus on bilateral sequential negotiations over a set of divisible issues. The setting for our study is as follows. The players have time constraints in the form of deadlines and discount factors. They also have different preferences for different issues and these preferences are represented as utility functions. Each player knows its own utility function but not that of the other. For this setting, the specific problem we address is as follows: there are m issues available for negotiation but a subset of g < m issues must be chosen and an ordering must be determined for them so as to maximize an individual player’s utility. We present polynomial time methods for solving this problem.