A Two-Party Non-Informative Efficient Negotiation Protocol

In this contribution, we focus on the negotiation over continuous issues and in particular we investigate the jointly Improving Direction Method (IDM). This method is well known both for its generality, since many other negotiation protocols can be considered as a particular subclass of it, and for its theoretical Pareto efficiency. In addition, it is easy to implement, and this makes IDM a very good candidate for an automated negotiation support system. However, despite its theoretical properties, in practice this method is inefficient, and this considerably reduces its performance in the operative context. In fact, the main drawback of IDM is the possibility to retrieve information about the other party’s utility during the negotiation steps and to exploit it in order to manipulate the negotiation itself. This implies a change of the efficient frontier in a way that the method converges to a different, hence inefficient, frontier. In particular, we firstly prove two drawbacks of the IDM, namely that IDM is not a Strategy-Proof (SP) nor an Information Concealing (IC) protocol. More precisely, we prove that the concurrent lack of SP and IC implies the actual non-efficiency of IDM. Finally, we propose a probabilistic protocol, which has the same computational effort of IDM, but it is both IC and stochastically SP which therefore gains the Pareto efficiency. A numerical investigation shows the effectiveness of the proposed approach.