Firstly, we took a look at some of the negotiation mechanisms that are used these days in various subjects such as grid computing, business, etc. A negotiation protocol2 is initiated in all the negotiation strategies, in which one presents an offer and the other party either accepts it or sends back a new proposal. This is known as an alternating offer as mentioned in [27]. However, time constraints should be specified since this can go on for months. Various negotiation strategies3have been enforced[28]:
• Contract Net • Auction Model • Game Theory Based
• Discrete Optimal Control Model
The negotiation strategies are selected based on the type of business that each provider is running. The provider needs to make an elaborate analysis of the negotiation mechanisms available to ensure that he/she has selected the proper one for the business that can bring benefits on the long run.
The first negotiation strategy discussed in this dissertation is the Contract Net protocol which is used to exchange the Service-Level Agreement(SLA) between the provider and the customer[27]. In Contract Net, an agent acts as a manager evaluating the task announcements from other agents and bids for the tasks that the agent is engaged in. This type of protocol can have only two possible bid outcomes: accept or reject. Therefore, Contract Net is convenient for multilateral processes. However, it has some drawbacks as well. The protocol cannot provide feedback for an acceptable agreement between the two parties. Because of this the protocol is not useful for bilateral process. Therefore, it will not be of any use in the rest of the dissertation, since the main reason of the paper is to come up with a new negotiation mechanism that can benefit both parties through communication and interaction.
The second negotiation mechanism is Auction, one of the most used mechanisms these days. Auctions are used mostly for antic pieces, painting, grid computing, etc. This model of negotiation allows both parties to communicate, they are either in the same room making bids or separately in case the bid is sealed. Auctions are generally, one-to-many negotiation, meaning that a seller can have many buyers, or vice versa as mentioned in [28]. For negotiation, both parties need to agree on the offer without any penalties in case of rejection. There are different types of negotiation:
2In this dissertation, negotiation protocol will be considered as a set of norms that constrain the pro-
posal of negotiation.
• English Auction - it is an ascending auction. The bidding starts at the reservation price and progresses until only one bidder is left. This is equivalent to the Vickrey model. The resources are given to the user that values them the most. The winner claims the item at the last bidding price.
• Dutch Auction - it is a descending auction. The auctioneer begins with a price too high for any buyer and then progressively goes lower on the price until someone requests it. The winner takes the item at the price it was bid. This is not neces- sarily effective because users might still end up paying more than what the item costs.
• First-price, sealed bid Auction - The bidders submit the price they are willing to pay. All the prices are opened at the same time and the winner is the one who is willing to pay the most.
• Vickrey Auction - Bidders submit a single irrevocable, sealed bid. They are not aware of what the others bid. The bids are all opened at once and the winner is the one that is willing to bid the most for the item, and he/she will pay the second-highest price that was bid.
• Multiround sealed bid Auction - each round has a deadline at the end of the round. It can either start a new one or the auction is closed. This might take too much time.
• Electronic bulletin board approach - bidders can check the bulletin board and they have a chance to bid over the highest bid. This is common for Internet based where people are all over the globe.
• Yankee Auction - the participants pay the amount they bid.
• Non discriminative Auction - refers to the bidders that won the auction pay the lowest bid rather than what they bid for.
When creating an auction there needs to be some policy choices applied[31]: • Anonymity - in a sealed auction the number of items being auctioned and the
number of items bid for each bid, don’t need to be revealed. Only the winning bidders could be revealed. The inventory should not be disclosed. However, in an open bid all these could be exposed beforehand.
• Restrictions on bid amount - Seller can specify the minimum starting bid. If the proposal happens regularly for an item then the minimum bid can be calculated based on the history known.
• Rules for closing the bid - it can have a closing time or it can go on until some certain time is elapsed between the bids. It can also be closed when the items have
been sold.
• Evaluation rules and breaking tied bids - when an item is sold a higher bid is better than a lower bid. If the two bids have the same quantity then it can be given to the one that arrived first.
• Services provided to sellers and bidders - reserved prices is one thing that can be provided to the sellers by the auctioneers. Another one can be to "certify the quality of the product, collecting payment on behalf of the seller", etc.
To conclude what it was described above, the auction model is used mostly for dynamic resource allocation. Therefore, the negotiation strategy going to be used in this dissertation embraces the Vickrey model. The reason for choosing this auction model, except the fact of being dynamic, is that it can be inference-proof. By inference-proof negotiation we can understand that if an auction is set properly neither the buyer nor the seller have to lie about their strategies in order to win. The other auction model that will be used is the Yankee auction. This is used when there is only one user bidding at a time.
Another negotiation strategy is the Game Theory Based Model. In this model, each agent has the responsibility to offer a plan, if the plan is accepted by all users then the negotiation is terminated. If agents choose "out" or no agreement is made then the process is turned down.
The last negotiation strategy discussed in this paper is Discrete Optimal Control Model. This is optimized for the market model. The Discrete Optimal Control Model consists of three steps as specified in [28]: getting all the information together, coming up with a decision and making the decision known. The information acquired can be about price, tasks, the number of tasks, etc. After gathering all this information the mar- ketplace agent can decide what algorithm will be appropriate. In the end, the decision can be made available to other related agents. The mechanism has m processors and n tasks. Some assumptions and constraints need to be made according to the needs of the users. The mechanism is meant to give the optimal solution.