Contract price

Abstract: In automated negotiation systems consisting of self-interested agents, contracts have traditionally been binding. Leveled commitment contracts-i.e. contracts where each party can decommit by paying a predetermined penalty were recently shown to improve Pareto efficiency even if agents rationally decommit in Nash equilibrium using inflated thresholds on how good their outside offers must be before they decommit. This paper operationalizes the four leveled commitment contracting protocols by presenting algorithms for using them. Algorithms are presented for computing the Nash equilibrium decommitting thresholds and decommitting probabilities given the contract price and the penalties. Existence and uniqueness of the equilibrium are analyzed. Algorithms are also presented for optimizing the contract itself (price and penalties). Existence and uniqueness of the optimum are analyzed. Using the algorithms we offer a contract optimization service on the web as part of Mediator, our next generation electronic commerce server. Finally, the algorithms are generalized to contracts involving more than two agents.

Abstract: Experiments reported in this paper clarify and extend results of previous research into the impact of reference points on valuation judgment. The value judgments of expert commercial appraisers from the USA who were not familiar with the geographical setting of the subject property were influenced by a variety of reference points. In order of significance of impact, these influential reference points were: the uncompleted contract price of a comparable property; the uncompleted contract price of the subject property; and the value opinions of other experts. This hierarchy of impact is consistent with both the degree to which each reference point is sanctioned by normative US training and the degree to which each reference point is generally available to US experts. Comparison with previous research suggests that market uncertainty as reflected by geographical unfamiliarity has a role in triggering reference point anchoring.

Abstract: The longer a concession lasts, the less effect the initial rounds of bidding will have on the terms of the concession over its full life. Much more influential will be periodic renegotiations or price reviews, which under standard concessions are hard to settle by competition. It has been suggested that competition could be brought to bear by periodically reauctioning a concession, which would limit the potential for exercise of market power by concessionaires. If contracts can be well written and rebidding is practical, periodic reauctioning offers an effective solution to the natural monoply problem. Price regulation may no longer be necessary, and rebidding may help with contract adjustment. This Note examines the case for rebidding.