Game Over: Facing the AI Negotiator
13 Pages Posted: 23 Sep 2024
Date Written: July 03, 2024
Abstract
AI applications will put an end to negotiation processes as we know them. The typical back-and-forth communication and haggling in a state of information insecurity could soon be a thing of the past. AI applications will increase the information level of the parties and drastically reduce transaction costs. A quick and predictable agreement in the middle of a visible bargaining range could become the new normal. But sophisticated negotiators will shift this bargaining range to their advantage. They will automate negotiation moves and execute value-claiming strategies with precision, exploiting remaining information asymmetries to their advantage. Negotiations will no longer be open-ended communication processes. They will become machine-driven chess end games. Large businesses will have the upper hand in these end games.
Keywords: Negotiations, Negotiation Dynamics, Artificial Intelligence, Algorithms, Algorithmic Negotiator, Information, Information Asymmetries, BigTech
JEL Classification: K12, K2, K41, M1, M2
Suggested Citation: Suggested Citation