Pacific Asia Conference on Information Systems ( PACIS ) 2007 Reserve Price Reporting Mechanisms for Negotiation Support Systems

Information and Communication Technologies (ICT) changed our everyday business drastically. Business routines have been transformed to online activities. New theories and models were developed for the brand new online environment. For online negotiations, however, the research on new mechanisms is not enough, especially for bilateral distributive negotiations. A reserve price reporting mechanism (RPR) together with its extended version (ERPR) is proposed in this paper. The key improvement of reserve price reporting mechanisms is to let the negotiators report their reserve price to a third-party system before they actually start the negotiation. Analytical models of these mechanisms are built to prove truth revelation condition and the reduction of total social welfare comparing with traditional direct bargaining (TDB). A prototype of this RPR system is developed and a lab experiment is conducted to test the performance of the three mechanisms. The results of the experiment support that the reserve price report mechanisms proposed are more efficient than the traditional one in several dimensions.

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