1. Emotion as Decision Engine: Model of Emotion in Negotiation and Decision-Making Bilyana Martinovski, Stockholm University, Sweden Wenji Mao, Chinese Academy of Sciences, China Model of Emotion in Decision-Taking Virtual Agent – Dr. Perez talking to Captain EUROCOGSCI 20-25 MAY 2011, SOFIA, BULGARIA Theory of Mind models of beliefs, goals, desires, memories and emotions Introduction The purpose of this paper is to present and operationalize a model of emotion in negotiation (MEND), which reflects the active role emotion plays in decision-making as a modifier of Theory-of–Mind models, goals and strategies. The model is based on empirical studies of empathy in human interaction in different activities such as plea bargains, simulated negotiations, doctor patient consultations, and Human-Virtual Agent interactions. It is applied and operationalized in a Virtual Agent’s cognitive architecture for the purpose of enhancing artificial social intelligence. Theory and Method Evolution gave privilege to the limbic system: emotional feedback is present in lower species, but other cortical cognitive feedback is present only in higher species (Fuster 2003). Emotion influences decision-taking on neurological level (Damasio 1994) thus Appraisal Theory is insufficient for design of such cognitive processes. Goal-driven emotion models lack capacity for Theory-of- Mind-based reasoning, which explains emotions, such as empathy (Iacoboni 2005) “The procedure is one of reciprocal adaptation (RA) where each participant gradually learns to adapt and to enter into the other’s frame of reference.” (Gumperz 1982: 3). Conclusions Emotion is a complex phenomenon with cognitive and behavioral aspects and manifestations. In this paper, we study the role of emotion in negotiation and demonstrated in different ways how emotion can be an engine of argumentation, driving the wagons of rational thought. Specific linguistic manifestations of emotional dominance (flattery, sarcasm, ridicule, aggression etc.) and reciprocal adaptation function as strategic means for negotiation with different levels of awareness - from lexical choices to tones of voice and paralinguistic expressions. Based on there observations, the paper presents a model of dynamic re-interpretation and re-contextualization of negotiation, MEND (Modeling Emotion in Negotiation and Decision-making), according to which emotions contribute to the changes of goals and strategies during negotiation. The purpose of the model is to aid understanding of the role of emotion in negotiation but also to AI models of social intelligence. The operationalization of the model relates adjacent turns and utterances to updates of Theory of Mind strategies, transactive and interactive goals, tactics, and interpretations of emotion, either on primary or on appraisal and coping level. References Damasio, A. (1994) Descartes’ Error: Emotion, Reason, and the Human Brain. Putnam Publishing. Fuster, J.M. (2003) Cortex and Mind: Unifying Cognition. Oxford University Press. Gumperz, Johan. J. 1982. Discourse Strategies. Cambridge University Press. Iacoboni, M. (2005) Understanding others: imitation, language, empathy. In S. Hurley and N. Chater (Eds) Perspectives on imitation: from cognitive neuroscience to social science. Cambridge, MA: MIT Press. Martinovski, B. & Mao, W. 2009. Emotion as an argumentation engine: Modeling the role of emotion in negotiation. Group Decision and Negotiation Journal, 18, 235-259. EE stands for Empathy Elicitation Phase 3 has arguments, which show RA and Theory-of Mind models.