1. Development of recursive decision making model in bilateral construction procurement negotiation.
- Author
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Leu, Sou-Sen, Pham, Vu Hong Son, and Pham, Thi Hong Nhung
- Subjects
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RECURSIVE functions , *DECISION making , *INDUSTRIAL procurement , *NASH equilibrium , *ALGORITHMS , *BAYESIAN analysis , *GAME theory - Abstract
Price negotiation in construction procurement is a form of decision making where contractor and supplier jointly search for a mutually agreed solution. In price negotiation, with information available about the agent's preferences, a negotiation may result in a mutually beneficial agreement. However, self-interested agents may not be willing to reveal their preferences, and this can increase the difficulty of negotiating a beneficial agreement. In order to overcome this problem, this paper proposes a Bayesian-based approach which can help an agent to predict its opponent's preference in bilateral negotiation. The proposed approach employs Bayesian theory to analyze the opponent's historical offers and to approximately predict the opponent's preference over negotiation issue. A Nash equilibrium algorithm is also integrated into the prediction approach to help agents on how to propose beneficial offers based on the prediction results. Validation results indicate good performance of the proposed approach in terms of utility gain and negotiation efficiency. [ABSTRACT FROM AUTHOR]
- Published
- 2015
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