A neural model of bilateral negotiation consisting of one and two issues.

110 Pages·1.5 MB·en_US

by  Strand, Neil B.;Bui, Tung X.

NAVAL POSTGRADUATE SCHOOL
Monterey, California
THESIS
A NEURAL MODEL OF BILATERAL NEGOTIATION
CONSISTING OF ONE AND TWO ISSUES
by
NEIL B. STRAND
SEPTEMBER, 1991
Thesis Advisor: Tung Bui
Approved for public release; distribution is unlimited
125875?

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11 TITLE (IncludeSecurityClassification)
ANeuralModelOfBilateralNegotiationConsistingofOneandTwo Issues(UNCLASSIFIED)
12 PERSONALAUTHOR(S) Strand,NeilB.
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Master'sThesis From To 1991 September 101
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Theviewsexpressedinthisthesisarethoseoftheauthoranddonotreflecttheofficial policyorpositionoftheDepartmentofDefenseortheU.S.
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17 COSATICODES 18 SUBJECTTERMS(continueonreverseifnecessaryandidentifybyblocknumber)
FIELD GROUP SUBGROUP Neuralnetwork,Negotiation,Mentalmodelofnegotiation.Decisionmaking
19 ABSTRACT(continueonreverseifnecessaryandidentifybyblocknumber)
Thisthesisdemonstratesthatneuraltechnologymaybesuccessfullyemployedtomimicsomeofthethoughtprocessesofanegotiatorduring
abilateralnegotiation. Usingtheconstraintsatisfactionparadigm,originallydevelopedtoexploreparalleldistributedprocessing,aneural
networkisproposedtosimulatethethoughtprocessofabuyerwhonegotiatesthepurchaseofagoodbasedonpriceandquality.
Thefindingsofthisthesissuggestthatcontinuedresearchinneuralnetworkstoreplicatethementalmodelofthenegotiatorholdsgreat
promise. Theabilitytomodeltruebeliefsandevaluationmethodshasanadvantageovermoretraditionalyprescriptivemodels. Theneural
networkmodelallowsincorporationofhumanirrationalityandprovidesanabilitytoassesshowthatirrationalityaffectsthenegotiation
outcome.
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Approved for public release; distribution is unlimited.
A Neural Model ofBilateral Negotiation
ConsistingofOne and Two Issues
by
Neil B Strand
v
Lieutenant United States Navy
,
B.A., University ofMinnesota, 1984
Submitted in partial fulfillment
ofthe requirements for the degree of
MASTER OF SCIENCE IN INFORMATION SYSTEMS
from the
NAVALPOSTGRADUATE SCHOOL
SEPTEMBER, 1991
n
ABSTRACT
This thesis demonstrates that neural technology may be successfully
employed to mimic some of the thought processes of a negotiator during a
bilateral negotiation. Using the constraint satisfaction paradigm, originally
developed to explore parallel distributed processing, a neural network is
proposed to simulate the thought process of a buyer who negotiates the
purchase of a good based on price and quality.
The findings of this thesis suggest that continued research in neural
networks to replicate the mental model of the negotiator holds great
promise. The ability to model true beliefs and evaluation methods has an
advantage over more traditionally prescriptive models. The neural network
model allows incorporation of human irrationally and provides an ability to
assess how that irrationality affects the negotiation outcome.
111
l.l
TABLE OF CONTENTS
I. INTRODUCTION 1
A. RESEARCH OBJECTIVE 1
B. RESEARCH BACKGROUND 1
C. RESEARCH METHOD 2
D. SCOPE AND LIMITATIONS 2
E. THESIS ORGANIZATION 3
II. NEGOTIATION, NEGOTIATION SUPPORT AND NEURAL
NETWORKS 4
A. ISSUES IN NEGOTIATION 4
1. The People and the Problem 4
2. Communications 5
3. Identify Real Interests 5
4. Mutual Gain Options 6
5. Objective Criteria 6
B. Negotiation Support Systems 7
C. Neural Networks 8
I I I. BUILDING A NEURAL APPLICATION 10
A. STRUCTURE FOR BUILDING A NEURAL APPLICATION 10
.
B. DEFINE THE PROBLEM 10
1. Why Use a Neural Network? 11
IV