Can holistic declaration of preferences improve a negotiation offer scoring system?

Abstract

In this paper, we analyse the problem of determining a negotiation offer scoring system using an alternative approach to the classic direct rating (DR). We examine the effectiveness of the prenegotiation preference elicitation on the basis of holistic judgments, supported by a software decision support tool. This approach is based on rank-ordering of examples of complete offers, which is then disaggregated using the Utilités Additives (UTA) method. In a series of studies, we analyse the accuracy of the scoring systems obtained from these approaches, as well as the negotiators’ subjective evaluation of their use and usefulness. The technical capability of the various setups of the UTA-based disaggregation models to produce accurate scoring systems is verified by simulation in Study 1. The empirical applicability of the most promising UTA-based models is studied in two experiments, in which the negotiators used examples of both predefined and self-declared sets of offers (Study 2), or applied an enhanced UTA algorithm (Study 3). The enhanced algorithm used a predefined set of offers, implemented certain elements of DR, and allowed for iterative improvements of the scoring system. The results show that the UTA-based approach works in a technical sense, but empirically its performance is worse than DR unless the set of example offers is predefined. The enhanced algorithm produced a better scoring system, but users' subjective evaluations were mixed.