Concession patterns in multi-issue negotiations and reverse auctions

Abstract

Concession-making plays an important tactical role in interactions among business partners. In multi-issue negotiations a concession refers to the amount of utility a party decides to give up by making next offer. In multi-attribute auctions concession is reflected in the next bid by a bidding party that abides by the rules of a given auction mechanism. The purpose of this work is to share insights into concession-making behavior in multi-bilateral multi-issue negotiations vs. multi-attribute reverse auctions. To this end experiments have been conducted featuring auction and negotiation mechanisms. One finding indicates that participants in auctions tend to make larger concessions than those involved in negotiations. Another finding shows that the negotiators' effort to make a concession may not be perceived by their counterparts