Much of the economic value of electronic commerce comes from the automation of interactions between businesses and individuals. Game theory is a useful set of tools that can be used by designers of electronic-commerce applications in analyzing and engineering of automated agents and communication protocols. The central theoretical concept used in game theory is the Nash equilibrium. In this article, I show how the outcomes supported by a Nash equilibrium can positively be enlarged using automated negotiations.
We describe how entangled quantum states can aid in coordination, cooperation and resource allocation in multi-agent systems. These protocols provide alternatives to conventional methods, with different tradeoffs of capabilities and information privacy. We also present results of human-subject experiments with simulated versions of some of these methods, showing people can learn to use entangled states effectively without training in quantum mechanics. Thus these quantum protocols are suitable for mixed systems consisting of human and software agents. These techniques are beneficial with even a few bits and operations, making their physical implementation much easier than quantum applications to hard computational problems such as factoring or search.
We develop a model for analyzing complex games with repeated interactions, for which a full game-theoretic analysis is intractable. Our approach treats exogenously specified, heuristic strategies, rather than the atomic actions, as primitive, and computes a heuristic-payoff table specifying the expected payoffs of the joint heuristic strategy space. We analyze two games based on (i) automated dynamic pricing and (ii) continuous double auction. For each game we compute Nash equilibria of previously published heuristic strategies. To determine the most plausible equilibria, we study the replicator dynamics of a large population playing the strategies. In order to account for errors in estimation of payoffs or improvements in strategies, we also analyze the dynamics and equilibria based on perturbed payoffs.
Providing agents with strategies that will be robust against deviations by coalitions is central to the design of multi-agent agents. However, such strategies, captured by the notion of strong equilibrium, rarely exist. This paper suggests the use of mediators in order to enrich the set of situations where we can obtain stability against deviations by coalitions. A mediator is a reliable entity, which can ask the agents for the right to play on their behalf, and is guaranteed to behave in a prespecified way based on messages received from the agents. However, a mediator can not enforce behavior; that is, agents can play in the game directly without the mediator's help. We prove some general results about mediators, and concentrate on the notion of strong mediated equilibrium; we show that desired behaviors, which are stable against deviations by coalitions, can be obtained using mediators in a rich class of settings.
Department of Economics University of Bristol 8 Woodland Road Bristol BS8 1TNFEngland Abstract This paper analyzes automated distributive negotiation where agents have firm deadlines that are private information. The agents are allowed to make and accept offers in any order in continuous time. We show that the only sequential equilibrium outcome is one where the agents walt until the first deadline, at which point that agent concedes everything to the other. This holds for pure and mixed strategies. So, interestingly, rational agents can never agree to a nontrivial split because offers signal enough weakness of bargaining power (early deadline) so that the recipient should never accept. Similarly, the offerer knows that it offered too much if the offer gets accepted: the offerer could have done better by out-waiting the opponent. In most cases, the deadline effect completely overrides time discounting and risk aversion: an agent's payoff does not change with its discount factor or risk attitude. Several implications for the design of negotiating agents are discussed. We also present an effective protocol that implements the equilibrium outcome in dominant strategies. 1 Introduction Multiagent systems for automated negotiation between self-interested agents are becoming increasingly important due to both technology push and application pull. The competitive pressure on the side with many agents often reduces undesirable strategic effects. On the other handFmarket mechanisms often have difficulty in "scaling down" to small numbers of agents (Osborne & Rubinstein 1990). In the limit of one-to-one negotiationFstrategic considerations become prevalent.