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Generating Pareto Solutions in a Two-Party Setting: Constraint Proposal Methods

Author

Listed:
  • Harri Ehtamo

    (Systems Analysis Laboratory, Helsinki University of Technology, POB 1100, 02015 HUT, Finland)

  • Raimo P. Hämäläinen

    (Systems Analysis Laboratory, Helsinki University of Technology, POB 1100, 02015 HUT, Finland)

  • Pirja Heiskanen

    (Systems Analysis Laboratory, Helsinki University of Technology, POB 1100, 02015 HUT, Finland)

  • Jeffrey Teich

    (New Mexico State University, Las Cruces, New Mexico 88001)

  • Markku Verkama

    (Systems Analysis Laboratory, Helsinki University of Technology, POB 1100, 02015 HUT, Finland)

  • Stanley Zionts

    (State University of New York at Buffalo, Buffalo, New York 14260)

Abstract

This paper presents a class of methods, called constraint proposal methods, for generating Pareto-optimal solutions in two-party negotiations. In these methods joint tangents of the decision makers' value functions are searched by adjusting an artificial plane constraint. The problem of generating Pareto-optimal solutions decomposes into ordinary multiple criteria decision-making problems for the individual decision makers and into a coordination problem for an assisting mediator. Depending on the numerical iteration scheme used to solve the coordination problem, different constraint proposal methods are obtained. We analyze and illustrate the behaviour of some iteration schemes by numerical examples using both precise and imprecise answers from decision makers. An example of a method belonging to the class under study is the RAMONA method, that has been previously described from a practical point of view. We present the underlying theory for it by describing it as a constraint proposal method, and include some applications.

Suggested Citation

  • Harri Ehtamo & Raimo P. Hämäläinen & Pirja Heiskanen & Jeffrey Teich & Markku Verkama & Stanley Zionts, 1999. "Generating Pareto Solutions in a Two-Party Setting: Constraint Proposal Methods," Management Science, INFORMS, vol. 45(12), pages 1697-1709, December.
  • Handle: RePEc:inm:ormnsc:v:45:y:1999:i:12:p:1697-1709
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    File URL: http://dx.doi.org/10.1287/mnsc.45.12.1697
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    References listed on IDEAS

    as
    1. James K. Sebenius, 1992. "Negotiation Analysis: A Characterization and Review," Management Science, INFORMS, vol. 38(1), pages 18-38, January.
    2. Osborne, Dale K, 1976. "Cartel Problems," American Economic Review, American Economic Association, vol. 66(5), pages 835-844, December.
    3. Teich, Jeffrey E. & Wallenius, Hannele & Kuula, Markku & Zionts, Stanley, 1995. "A decision support approach for negotiation with an application to agricultural income policy negotiations," European Journal of Operational Research, Elsevier, vol. 81(1), pages 76-87, February.
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    Cited by:

    1. repec:spr:grdene:v:23:y:2014:i:1:d:10.1007_s10726-012-9329-z is not listed on IDEAS
    2. repec:spr:grdene:v:16:y:2007:i:5:d:10.1007_s10726-006-9058-2 is not listed on IDEAS
    3. repec:spr:grdene:v:18:y:2009:i:2:d:10.1007_s10726-008-9119-9 is not listed on IDEAS
    4. repec:spr:grdene:v:10:y:2001:i:6:d:10.1023_a:1012256222803 is not listed on IDEAS
    5. repec:spr:joptap:v:140:y:2009:i:3:d:10.1007_s10957-008-9465-4 is not listed on IDEAS
    6. Ehtamo, Harri & Kettunen, Eero & Hamalainen, Raimo P., 2001. "Searching for joint gains in multi-party negotiations," European Journal of Operational Research, Elsevier, vol. 130(1), pages 54-69, April.
    7. repec:spr:grdene:v:15:y:2006:i:5:d:10.1007_s10726-006-9041-y is not listed on IDEAS
    8. Zhang, Linlan & Song, Haigang & Chen, Xueguang & Hong, Liu, 2011. "A simultaneous multi-issue negotiation through autonomous agents," European Journal of Operational Research, Elsevier, vol. 210(1), pages 95-105, April.
    9. repec:spr:grdene:v:10:y:2001:i:6:d:10.1023_a:1012297813663 is not listed on IDEAS
    10. repec:spr:grdene:v:22:y:2013:i:1:d:10.1007_s10726-011-9254-6 is not listed on IDEAS
    11. Heiskanen, Pirja & Ehtamo, Harri & Hamalainen, Raimo P., 2001. "Constraint proposal method for computing Pareto solutions in multi-party negotiations," European Journal of Operational Research, Elsevier, vol. 133(1), pages 44-61, August.
    12. Kitti, Mitri & Ehtamo, Harri, 2007. "Analysis of the constraint proposal method for two-party negotiations," European Journal of Operational Research, Elsevier, vol. 181(2), pages 817-827, September.
    13. repec:spr:grdene:v:22:y:2013:i:3:d:10.1007_s10726-012-9283-9 is not listed on IDEAS
    14. repec:spr:grdene:v:18:y:2009:i:4:d:10.1007_s10726-008-9148-4 is not listed on IDEAS
    15. Lou, Youcheng & Wang, Shouyang, 2016. "Approximate representation of the Pareto frontier in multiparty negotiations: Decentralized methods and privacy preservation," European Journal of Operational Research, Elsevier, vol. 254(3), pages 968-976.

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