Negotiation Over Decommitment Penalty

We consider the role of negotiation in deciding decommitment penalties. In our model, agents simultaneously negotiate over both the contract price and decommitment penalty in the contracting game and then decide whether to decommit from contracts in the decommitment game. Experimental results show that setting penalties through negotiation achieved higher social welfare than other exogenous penalty setting mechanisms.

Authors

• Bo An Nanyang Technological University
• Victor Lesser University of Massachusetts at Amherst

Keywords

• Negotiation agents
• leveled-commitment
• penalty