Reservation price reporting mechanisms for online negotiations
- Authors
- Kwon, Seungwoo; Yoo, Byungjoon; Kim, Jinbae; Shang, Wei; Lee, Gunwoong
- Issue Date
- Mar-2009
- Publisher
- ELSEVIER SCIENCE BV
- Keywords
- Online negotiation; Reservation price
- Citation
- DECISION SUPPORT SYSTEMS, v.46, no.4, pp.755 - 762
- Indexed
- SCIE
SCOPUS
- Journal Title
- DECISION SUPPORT SYSTEMS
- Volume
- 46
- Number
- 4
- Start Page
- 755
- End Page
- 762
- URI
- https://scholar.korea.ac.kr/handle/2021.sw.korea/120529
- DOI
- 10.1016/j.dss.2008.11.006
- ISSN
- 0167-9236
- Abstract
- To facilitate online negotiations, this paper proposes a reservation price reporting mechanism (RPR) and its extended version (ERPR), in which negotiators are invited to report their reservation price to a third-party system before initiating negotiations. Analyses using analytical models show that sellers and buyers report their true reservation prices under certain conditions with respect to the back-dragging costs. Analytical models also show that total social welfare can be increased by two reservation price reporting mechanisms. Then lab experiments are conducted to compare the performance of RPR, ERPR and the traditional direct bargaining (TDB). Consistent with the analytical models, results of the lab experiments show that RPR and ERPR reduce the number of negotiation rounds before reaching an agreement and increase negotiators' social welfare. These lab results testify to the efficiency of RPR and ERPR over TDB. (C) 2008 Elsevier B.V. All rights reserved.
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Collections - Korea University Business School > Department of Business Administration > 1. Journal Articles
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