When and why does haggling occur?, 1 st ESSA Conference, Groningen, September 2003, bruce slide-1 When and why does haggling occur? -

When and why does haggling occur?, 1st ESSA Conference, Groningen, September 2003, http://cfpm.org/~bruce slide-1

When and why does haggling occur?- some lessons from a qualitative but computational

simulation of negotiation

Bruce Edmonds etc.*Centre for Policy Modelling

Manchester Metropolitan University


*Acknowledgements

• Scott Moss (CPM)• Juliette Rouchier (Grequam/CNRS)• David Hales (no fixed abode)• Rosaria Conte, Mario Paulucci (ISTC/CNR)• Jan Rotmans (ICIS)• Other members of the FIRMA project• Working papers from the Kellogg centre for

the study of negotiation


Outline of talk

• Introduction

• The simulation

• Some simple results

• Discussion

But first …


A Digression:

Against Numbers


OK, so not all uses of numbers are entirely wicked, for example:

• If it clearly represents something known to have numeric properties (e.g. money or temperature)

• If it is a post hoc summary of the outcomes of many parts

• If it simply is a way of implementing a structure that is justified as a representation in its own sake

But not when the numbers are an essential part of the simulation mechanism and there is no

justification for their numeric nature


What’s wrong with numbers?

• They are too easy to use– They are often used to represent things whose

nature is fundamentally qualitative– Representing processes in a qualitative way is

more difficult and costly– Frames the way people think about things– Can imply a false generality

• They are very difficult to use well– Many subtle traps (e.g. Polhill et al. talk)– Difficult to interpret onto complex phenomena

safely


Numbers are often used… …even when there is no good representational reason for doing so because…

• …it makes it look like real science (though hard equations or logic is even better)

• …other people use numbers (e.g. economists)

• …it is convincing (especially if you have some nice graphs)

• …it is easy (availability of analytic tools)• …they could not think of any other way of

doing it (frequently!)


Some properties of numbersSee “measure theory” in the philosophy of science 1930-1970 for axioms and precise formulation

• Unique labels: but then you can not use comparisons or arithmetic

• Total ordering: but then you can not use arithmetic

• Exact values: what is being represented must be exact (no measurement involved)

• Approximate values: you need to be very careful about errors and comparisons

Weak properties

Strong properties


In particular numbers are not suitable for representing…• Variety (vs. variation of a measure)• Information (vs. probability or entropy)• Usefulness (vs. utility) • Preference (vs. a total order)• Value (vs. price)• In fact … almost any mental property (unless

there is convincing evidence to the contrary)

…except where it is known that there is some underlying process ensuring uniformity and this use is well validated within the context of use


Questions to ask of a social simulation which uses numbers• Are the numbers just a way of implementing

something that is not really numerical or do the numbers represent something numerical?

• Does what is represented by a number obey the properties of numbers that are utilised in the simulation?– e.g. If reals are used for preferences how do we know

they are transitive, complete, dense?

• Is the use justified in this case - is it simply a case of thoughtless imitation/laziness?

• What does number/variable mean?• Is there a better way of doing this?


Introduction: About negotiation


Van Boven and Thompson (2001)- Kellogg working papers (on web)

Basic approach We propose that negotiation is best viewed as a problem solving enterprise in which negotiators use mental models to guide them toward a “solution.”

Where they define “mental models” as …… mental representations of the causal relations within a system that allow people to understand, predict, and solve problems in that system … Mental models are cognitive representations that specify the causal relations within a particular system that can be manipulated, inspected, “read,” and “run”…


Different “levels” that occur in negotiations

• Action bargaininge.g. If you hold the door open, I will carry the box

• Viewpoint communication/exchangee.g. however high you build dykes there will sometimes be enough rain to cause flooding

• Goal reformulation/change/discussione.g. I know you think this is expensive, but consider how much money you will save over the years to come

• Meta-discussion about the process itselfe.g. we are not getting anywhere lets get a beer


The model: A qualitative but computational simulation of

bargaining


In this model the participants don’t necessarily …

…have similar beliefs about the domain…have any built in drive towards agreement...have knowledge about other’s beliefs…agree upon the current state of world…have similar preferences among states…have the ability to work out optimal action…have an underlying utility function or even a

complete and transitive set of preferences…come to any agreement or understanding


However I do assume that…

…participants have common labels for actions so communication can occur

…the preferences of individuals are based on their beliefs and these judgements

…rounds of communication occur off-line …each possible outcome is judged on a limited

number of independent properties (!)…utterances and actions are public (!)…participants are honest w.r.t. beliefs (!)…goals, judgements, beliefs etc. do not change

during the negotiation (!)


The structure of the simulation

• Fixed number of participants

• Time structured into phases of negotiation then doing agreed actions etc.

• Each agent has belief network of states (the nodes) and arcs (conjunctions of actions) representing their view of cause and effect– Actions can cause changes of state– Each node has properties it is judged by– At each node certain actions are possible


Each agent, each negotiation round does the following:• looks for accessible states that are preferable to

the current one (using judgements on properties of states that are near current)

• makes requests or conditional offers in order to get to that state (if not already made)

• examines offers and requests for possible agreements and suggests them

• agrees to those acceptable to self• if all relevant parties agree then do actions as

they become possible in action phaseThe negotiation results from the interaction of

agents with different belief networks etc.


Messages:

Can someone please some-actions so we can achieve some-state?

I will some-actions if others some-other-actions.

I agree to some-actions if others some-other-actions.

Reports:Agent-name has done some-action.

(State of Agent-name ) is: some-state.


Example belief networks

Build defences

Expensive High flood defences

Normal flood defences

Possible floods

High rain Accept higher taxes

& Build

defences Accept higher taxes

Cheap High flood

defences

High flood defences

Normal flood defences

Possible floods High rain

Abnormal rain

Abnormal rain

Build defences

Accept higher taxes

& Build

defences

A PossibleCitizen’s view

A PossibleGovernment’s view


Trade-offs in the design

• Designed to be consistent with some observations of negotiations (descriptive)

• Representation of participants’ beliefs is potentially amenable to participatory techniques of elicitation

• But also expressive enough so that it can be adapted to investigate observed negotiations

• Is also easily extendable to further levels


Simple results: Buying a car


Buying a car

Give car

Start (no car, 20000)

Buyer

Car bought cheaply

(car, 10000)

Car bought expensively

(car, 0)

Get little (car,

10000)

Start (car, 0)

Seller

Pay 20000?

Get lots (car,

20000)

Car sold cheaply (no car, 10000)

Car sold expensively

(no car, 20000)

Pay 10000

Give car

Pay 10000 Pay 20000?

Give car expensively

Give car cheaply?

Give car cheaply?

Gave little (car,

10000)

Pay 20000

Gave lots (car, 0)

Pay 10000

Give car expensively

2x2x2x2=16 possible variations


Example output (I)

Seller: Can someone please Pay10000 so we can achieve GetLittle?Buyer: I will Pay10000 if others GiveCarCheaply.Seller: I will GiveCarCheaply if others Pay10000.Buyer: Can someone please Pay20000 and GiveCarExpensively so we

can achieve CarSoldExpensively?Buyer: I will Pay10000 if others Pay20000 and GiveCarExpensively.Seller: I agree to GiveCarCheaply if others Pay10000Buyer: I agree to Pay10000 if others GiveCarCheaplyBuyer has done Pay10000.Seller has done GiveCarCheaply.(State of Seller) is: CarSoldCheaply.(State of Buyer) is: CarSoldCheaply.

Seller does not think buyer would pay 20000; seller would give car for 10000; buyer would not pay

20000; and buyer thinks seller would sell for 10000.


Example output (II)

Seller: Can someone please Pay10000 so we can achieve GetLittle?

Buyer: I will Pay20000 if others GiveCarExpensively.

Seller: I will GiveCarCheaply if others Pay10000.

(State of Seller) is: Start.

(State of Buyer) is: Start.

Buyer does not offer to Pay10000 for car because it thinks the seller would not sell for that.

Seller does not think buyer would pay 20000; seller would give car for 10000; buyer would pay 20000; and

buyer does not think seller would sell for 10000.


Example output (III)

Buyer: I will Pay10000 if others GiveCarCheaply.Seller: Can someone please Pay20000 so we can achieve GetLots?Buyer: I will Pay20000 if others GiveCarExpensively.Seller: I will GiveCarExpensively if others Pay20000.Seller: Can someone please Pay10000 so we can achieve GetLittle?Buyer: I agree to Pay20000 if others GiveCarExpensivelySeller: I agree to GiveCarExpensively if others Pay20000Seller: I will GiveCarCheaply if others Pay10000.Buyer has done Pay20000.Seller has done GiveCarExpensively.(State of Buyer) is: CarSoldExpensively.(State of Seller) is: CarSoldExpensively.

Seller does think buyer would pay 20000; seller would give car for 10000; buyer would pay 20000; and buyer does think seller would sell for 10000.


Buying a car: outcome summary


Discussion


Some observations

(At least) two kinds/phases of negotiation in this model

1. Searching for one set of actions that participants can agree to

2. Trying to determine which of the possible agreements will occur

Case (1) more characterised by honesty than (2) because the signalling of possibilities can

determine the outcomes. This may depend on whether it is more important to get an

agreement or to get the best at risk of failure.


A request…

Can you give me ideas as how I might gain access to…

…transcripts of real negotiations with enough detail to distinguish the sort of offers, communications etc. I have here…

…where there is some evidence about the beliefs and goals of the participants…

…and ideally where changes of belief, goals etc. are signalled or otherwise indicated.


Questions/future directions?

• Test hypothesis that there are two phases/kinds of negotiation

• Can this be embedded in other simulations in a credible way?

• How does it compare to other models (e.g. Rouchier and Hales’ paper)

• Using this testbed to help inform observations about real negotiations?

• As a participatory tool? (Hexagon method in Zurich Water game)


Bruce Edmonds

bruce.edmonds.name

Centre for Policy Modelling

cfpm.org

The End

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When and why does haggling occur?, 1 st ESSA Conference, Groningen, September 2003, bruce slide-1 When and why does haggling occur? -