1. Institute for Visualization and Perception Research 1 © Copyright 1998 Haim Levkowitz Automated negotiations The best terms for all concerned Tuomas Sandholm sandhom@cs.wustl.edu

2. Institute for Visualization and Perception Research 2 © Copyright 1998 Haim Levkowitz Overview Automated negotiations Promising application areas Reallocation among agents Optimization Agent-to-agent vs. centrally mediated eMediator: features

3. Institute for Visualization and Perception Research 3 © Copyright 1998 Haim Levkowitz Automated negotiations Negotiation: key component in e- commerce Auto: computational agents Represent real-world parties Find & prepare contracts Benefits …

4. Institute for Visualization and Perception Research 4 © Copyright 1998 Haim Levkowitz Auto negotiation benefits Save human negotiation time Better at finding deals in combinatorially & strategically complex situations Not at cost to other parties Rapidly find solutions that optimize for all

5. Institute for Visualization and Perception Research 5 © Copyright 1998 Haim Levkowitz Promising application areas Retail e-commerce Electricity markets Bandwidth allocation Manufacturing planning & scheduling in subcontracting networks Distributed vehicle routing among independent dispatch centers Electronic trading of financial instruments

6. Institute for Visualization and Perception Research 6 © Copyright 1998 Haim Levkowitz Reallocation among agents Task reallocation among agents: key type of negotiation Allocate tasks to agents that handle them least expensively Marginal cost-based method for automated task reallocation Reallocate all types of items ….

7. Institute for Visualization and Perception Research 7 © Copyright 1998 Haim Levkowitz Items to reallocate Tasks Financial instruments Hours of electricity

8. Institute for Visualization and Perception Research 8 © Copyright 1998 Haim Levkowitz Cost-based reallocation Agent takes task from another as long as it is paid more by other agent than what costs to handle Agent gives task to another agent as long as it doesn’t have to pay more than it would cost to handle TRACONET: TRAnsportation Cooperation NET

9. Institute for Visualization and Perception Research 9 © Copyright 1998 Haim Levkowitz TRACONET Automated delivery of task reallocation among freight companies 1st distributed automated negotiation among self-interested agents Each agent Own Unix process Represents single company

10. Institute for Visualization and Perception Research 10 © Copyright 1998 Haim Levkowitz TRACONET (cont.) Agent takes on delivery tasks Gives out tasks Recontract-out tasks previously contracted-in

11. Institute for Visualization and Perception Research 11 © Copyright 1998 Haim Levkowitz Optimization Negotiation can get stuck in local optimization Task allocation suboptimal No original contract (O) profitable To solve: new contract types …

12. Institute for Visualization and Perception Research 12 © Copyright 1998 Haim Levkowitz New contract types C: cluster Exchange multiple tasks for payment S: swap task for another + sidepayment M: multiagent More than 2 parties in same contract OCSM …

13. Institute for Visualization and Perception Research 13 © Copyright 1998 Haim Levkowitz OCSM … Combine previous into atomic contract Guarantee globally optimal allocation Through finite number of contracts

14. Institute for Visualization and Perception Research 14 © Copyright 1998 Haim Levkowitz Agent-to-agent vs. centrally mediated Original: agent-to-agent Auction server ==> centrally mediated variant Agents send bids and tasks ==> Combinatorial auctions Allow users to express interrelated valuations of items

15. Institute for Visualization and Perception Research 15 © Copyright 1998 Haim Levkowitz eMediator: features E-commerce server Also services other than auctions Combinatorial bidding Bidding via price-quantity graphs Mobile agents Determine winners of combinatorial auction Identify profitable contacts for all

16. Institute for Visualization and Perception Research 16 © Copyright 1998 Haim Levkowitz Optimal winner determination Computationally complex ==> Added highly optimized search- based matching algorithm to solve problem

17. Institute for Visualization and Perception Research 17 © Copyright 1998 Haim Levkowitz Price-quantity graphs User can express continuous preferences

18. Institute for Visualization and Perception Research 18 © Copyright 1998 Haim Levkowitz Mobile agents User have agents participate in auctions while users disconnected from Internet Mobile agents execute on agent dock on or near auction host ==> Reduce network latency Key issue in time-critical bidding Mitsubishi’s Concordia agent dock

19. Institute for Visualization and Perception Research 19 © Copyright 1998 Haim Levkowitz Concordia Give mobile agents safe execution platform Bid Set up auctions Travel to other auction sites Observe activity at various auctions More later

20. Institute for Visualization and Perception Research 20 © Copyright 1998 Haim Levkowitz HTML interface Users instruct agents Automatic generation of Java code for mobile agents before launching

21. Institute for Visualization and Perception Research 21 © Copyright 1998 Haim Levkowitz Contract management Usually: binding ==> Can’t undo old commitments to accommodate new events E.g., tasks more costly than anticipated New offers more lucrative Alleviate: Leveled commitment contracting protocol …

22. Institute for Visualization and Perception Research 22 © Copyright 1998 Haim Levkowitz Leveled commitment contracting protocol Agents accommodate future events Option of unilateral decommit Decommitment penalty