Bargaining with Deadlines

This paper analyzes automated distributive negotiation whereagents havefirm deadlines that are private information. The agents are allowed to makeand accept offers in any order in continuous time. Weshow that the only sequential equilibrium outcomeis one wherethe agents walt until the first deadline, at which point that agent concedeseverythingto the other. This holds for pure and mixedstrategies. So, interestingly, rational agents can never agree to a nontrivial split because offers signal enoughweaknessof bargaining power (early deadline) so that the recipient should never accept. Similarly, the offerer knowsthat it offered too much if the offer gets accepted: the offerer could have done better by out-waiting the opponent. In mostcases, the deadline effect completelyoverrides time discounting and risk aversion: an agent’s payoff does not changewith its discount factor or risk attitude. Several implications for the design of negotiating agents are discussed. Wealso present an effective protocol that implementsthe equilibrium outcomein dominantstrategies.

Authors

• Tuomas Sandholm Carnegie Mellon University, Computer Science Department, Pittsburgh, USA Strategy Robot, Inc. Strategic Machine, Inc. Optimized Markets, Inc.
• Washington University
• Nir Vulkan
• University of Bristol

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