Identifying Most Probable Negotiation Scenario in Bilateral Contracts with Reinforcement Learning

Abstract

This paper proposes an adaptation of the Q-Learning reinforcement learning algorithm, for the identification of the most probable scenario that a player may face, under different contexts, when negotiating bilateral contracts. For that purpose, the proposed methodology is integrated in a Decision Support System that is capable to generate several different scenarios for each negotiation context. With this complement, the tool can also identify the most probable scenario for the identified negotiation context. A realistic case study is conducted, based on real contracts data, which confirms the learning capabilities of the proposed methodology. It is possible to identify the most probable scenario for each context over the learned period. Nonetheless, the identified scenario might not always be the real negotiation scenario, given the variable nature of such negotiations. However, this work greatly reduces the frequency of such unexpected scenarios, contributing to a greater success of the supported player over time.