Designing Heuristics: Hybrid Computational Models for Teaching the Negotiation of Complex Contracts

13 Pages Posted: 31 Mar 2009 Last revised: 14 Apr 2009

See all articles by Gregory Todd Jones

Gregory Todd Jones

University of Georgia - Terry College of Business; Georgia State University - Consortium on Negotiation and Conflict Resolution; Max Planck Institute for Research on Collective Goods

Date Written: March 30, 2009

Abstract

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.

Suggested Citation

Jones, Gregory Todd, Designing Heuristics: Hybrid Computational Models for Teaching the Negotiation of Complex Contracts (March 30, 2009). Available at SSRN: https://ssrn.com/abstract=1370525 or http://dx.doi.org/10.2139/ssrn.1370525

Gregory Todd Jones (Contact Author)

University of Georgia - Terry College of Business ( email )

Brooks Hall
Athens, GA 30602-6254
United States

Georgia State University - Consortium on Negotiation and Conflict Resolution ( email )

PO Box 4037
Atlanta, GA 30302-4037
United States

Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

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