Modeling and prediction of human negotiation behavior in human-computer negotiation

Abstract

• This study proposes a segmented linear regression Strategy (SLR) model, which can predict the opponent's future offer patterns. • Segmented linear regression method can model complex concession behavior dynamically. • A theoretical framework is built upon the hope-based and game-based negotiation theories. • The model is validated empirically through computer-to-computer and human-to-computer negotiation experiments based on a prototype system. With increasing e-commerce activities, the human–computer negotiation mechanism for online transactions emerges. This study proposes a segmented linear regression strategy (SLR) model, which can predict the opponent's future offer patterns and dynamically adjust the model parameters according to the opponent's behavior. We use the hope-based (behavior-oriented) and game-based (technical-oriented) negotiation theories as the theory ground to explicate the logic of the agent's negotiation strategy. Upon which we propose a theoretical model of bilateral negotiation as the framework for designing the SLR model. We then propose the testable hypotheses to evaluate the utility of the proposed model against the benchmark results. We build a prototype system and empirically test the hypotheses using computer-to-computer (CtC) and human-to-computer (HtC) negotiation experiments. The empirical results show that the proposed system outperforms the benchmark system in both CtC and HtC negotiations regarding deal price and utility. The proposed model provides an automated negotiation solution for online platforms that can improve the efficiency and effectiveness of their negotiation capability.