Designing Heuristics: Hybrid Computational Models for Teaching the Negotiation of Complex Contracts
Gregory Todd Jones
Georgia State University - College of Law; Georgia State University - Consortium on Negotiation and Conflict Resolution; University of Georgia - Terry College of Business; Max Planck Institute for Research on Collective Goods
March 30, 2009
The negotiation of even the most straightforward real-world contracts tends to be quite complex. A contract with only 25 distinct issues with two alternatives each presents the parties with more than 33 million possible contracts, far too many to be evaluated exhaustively within feasible time constraints. Furthermore, contract issues that exhibit high levels of interdependence result in highly nonlinear utility functions with the possibility of many local optima. This paper employs hybrid computational models, integrating both simulated annealing and tabu list optimization, to aid in the design of social heuristics and institutional mechanisms that may serve to improve the effectiveness of human negotiators.
Number of Pages in PDF File: 13working papers series
Date posted: March 31, 2009 ; Last revised: April 14, 2009
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