Developing e-Negotiation support
with a meta-modeling approach
in a Web services environment
Dickson Chiu
Senior Member, IEEE
dicksonchiu@ieee.org
Shing-Chi CHEUNG
Patrick C.K. Hung
Dept. of Computer Science
Hong Kong University of
Science & Technology
Sherina Y. Y. Chiu
K. K. Chung
Dept. of Computer Science &
Engineering,
Chinese University of Hong Kong
scc@cs.ust.hk
1
To be learned from this case
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Capture and abstract various business process requirements
Generalize them into an organized framework and model
Application of IT and CS to solve a business problem
Novelty - process support for NSS is much less studied (as
compared with decision models for negotiation)
Extend a traditionally human centric application
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into a Web service based platform
to support growing need for programmatic interface
for B2B
support negotiating agents – autonomous intelligent programs act
on behalf of a user
Architecture and Web service design
DSS 40(2005) 2
Introduction
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e-Contract
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Negotiation
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a decision process in which two or more parties make individual
decisions and interact with each other for mutual gain
negozio = shop in Italian …
e-Negotiation
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computerized facilitation or automation of a contract
cross-organizational business process
perform negotiation activities over the Internet
Web Services and Grid technologies and infrastructures
=> Context: extended e-Marketplace
DSS 40(2005) 3
Classification of Negotiation
Our Meta-model covers the following types of negotiation
 Bidding
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Bargaining
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Multilateral distributive negotiation
Formal, competitive procurement procedure
Usually involves two parties
Each party has a single but opposing objective
Each fights for the best value that opponent would still accept
Request for Proposals (RFP)
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Extended form of bargaining
Has a prelude phase of requirement & candidate identification
DSS 40(2005) 4
Project Background
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D.K.W. Chiu, S.C. Cheung, P.C.K. Hung, S.Y.Y. Chiu* and K.K.
Chung*. Developing e-Negotiation Process Support with a Metamodeling Approach in a Web Services Environment,
Decision Support Systems, 40:51-69, 2005. (*FYP students)
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Peliminary Version at ICWS'03, June 2003
6th Pacific Asia Conference on Information Systems, Sept 2002
D.K.W. Chiu, S.C. Cheung, P.C.K. Hung, and H.F. Leung. Constraintbased Negotiation in a Multi-Agent Information System with
Multiple Platform Support, HICSS37, Jan 2004.
S.C. Cheung, P.C.K. Hung and D.K.W. Chiu. On e-Negotiation of
Unmatched Logrolling Views, HICSS36, Jan 2003
(best paper nominee). (journal version under revision for JMIS)
S.C. Cheung, P.C.K. Hung and D.K.W. Chiu. A Meta-model for eContract Template Variable Dependencies Facilitating e-Negotiation,
ER2002, Oct 2002
DSS 40(2005) 5
Contract Templates
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Reference document based on which a new contract is created
Contains a set of template variables whose values are to be
negotiated
Particularly applicable to standard business interactions that could
be taken place over the Internet
Such as real-estate transactions, purchase and sale of goods, etc.
New e-Contracts for these business interactions can be defined
based on standard contract templates
Specific business interactions not covered by the clauses in
standard contract templates can be provided as contract variations
or contract escalations
The PURCHASER shall send a Letter of Credit for the GOODS to the SUPPLIER in
the currency of [ ] within [ ] days of the invoice date. The SUPPLIER shall on
receipt of the Letter of Credit ships the GOODS to the PURCHASER within [ ]
days and provides the PURCHASER with shipment details.
DSS 40(2005) 6
Motivation and Objectives
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e-Contract template and template variables facilitate
negotiation by avoiding uncontrolled openness of issues
Address specific semantic requirement of contracts for
supporting B2B applications
Reduce cost and improve effectiveness of negotiation
(avoid combinatorial explosion of issues)
Development of an effective and efficient negotiation
plan in a natural way
Rapid development and deployment of a flexible
negotiation support system (NSS) through reuse in a
e-Marketplace
A reference model for future research
DSS 40(2005) 7
Overall Meta-modeling Approach
1.
2.
3.
Based on business experience and requirements, contract
templates (with variables) are abstracted from previous contracts
Administrator models a contract template as an e-Contract
template
Suitable e-Negotiation processes are designed based on our metamodel for e-Negotiation processes
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4.
5.
Such as bargaining, auctions and RFP
Determine template variable relations (dependencies)
These designed processes are most likely repeatable and reusable for
a business.
NSS derive e-Negotiation plan
Designed e-Negotiation processes are executed with the support
of a NSS (e.g., exchange bids via Web Services)
Each successful e-Negotiation will lead to an e-Contract
DSS 40(2005) 8
Meta-Model of an e-Contract Template
e-Contract
involves
Party
2..*
depends
refines
1
e-Contract
Template
*
1..*
Contract
Clause
*
Template
Variable
*
*
references
Obligation
Permission
Prohibition
DSS 40(2005) 9
A Sales e-Contract Template as an
Instance of the Meta-model
Purchaser
:Party
involves
involves
depends
Supplier
:Party
consists of
Sales
:e-Contract Template
Shipping & Insurance
:Contract Clause
freight
:Template Variable
Deposit Payment
:Contract Clause
deposit
:Template Variable
insurance premium
:Template Variable
Pricing
:Contract Clause
quantity
:Template Variable
unit price
:Template Variable
Delivery
:Contract Clause
delivery date
:Template Variable
return policy
:Template Variable
DSS 40(2005) 10
Conceptual Model of e-Negotiation
and e-Contract
e-Negotiation
Conceptual
Model
Party
involves
2..*
Negotiation
1..*
resolves
Task 1 1..*
dr
1
iv
*
es
1..*
Offer
1
Issue
1
maps to *
s*
e
t
la
mu
r
o
f
1
Plan
*
1..*
Auxiliary
Variable
1..*
makes
e-Contract Contract
Conceptual Clause
Model
1..*
Template
Variable
*
Variable
1 *
precedes
*
* logrolls
has
1..*
Alternative
Value
specializes
consists of
Accepted Offer
Accepted Alternative Value
DSS 40(2005) 11
A Meta-Model of e-Negotiation Process in
UML Activity Diagram
Pre-negotiation
phase
define issues
and criteria
for each
all issues
collection
have been
of co-related
mapped
issue
derive variable
formulate
plan
organize tasks
relations
select e-Contract
template
[inconsistent]
Negotiation
phase
How we carry out
e-Negotiation in general …
validate
consistency
creation of
e-Contract
[consistent]
[reach consensus
on all variables]
make offers &
counter offers
[quit]
DSS 40(2005) 12
System Architecture
Enterprises
End users on
Multi-platform
Devices
Public UDDI
Registry
Web Services
Programmatic
Access
Web / WAP
Access
Internet
e-Marketplace
XSLT Processor
Web Front-end
Web Service Server
XSLT Stylesheets
bids &
offers
e-Negotiation
Executing
Subsystem
e-Negotiation
Session
Manager
e-Negotiation
process
e-Contract template,
template variables
e-Contract
Generator
e-Contract
e-Negotiation process
revised
e-Contract template,
template variables
e-Negotiation
Data &
Repository
existing
e-Contract
template
e-Negotiation
Process
Generator
task
dependency
Tasks
Organizer
variable
dependency
Search
Engine
Variable
Dependency
Editor
e-Contract
Template
Management
e-Contract
Template Editor
e-Contract
template
e-Negotiation
Matching
Subsystem
criteria,
issues
Criteria
& Issues
Editor
DSS 40(2005) 13
Bargaining e-Negotiation Process (1)
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Decide your offers
Select E-contract Template / Define Issues and Criteria
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business experience
formally from its old sale contracts
informally from quotations, purchase orders, invoices
other correspondences with its customers
typical contract template variables - product for sale, price,
quantity, delivery date, freight, payment terms, deposit, etc.
define issues
and criteria
select e-Contract
template
for each
all issues
collection
derive variable have been
of co-related
mapped
relations
issue
[inconsistent]
formulate
plan
organize tasks
validate
consistency
[consistent]
make offers &
counter offers
creation of
e-Contract
[reach consensus
on all variables]
[quit]
DSS 40(2005) 14
Web Services for Bargaining - Offer
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Service Name: placeNewBargainOffer
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Service Name: withdrawOffer
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Input: Item Description, Contract Template ID, Proposed
Template Variable Values, Additional Requirement List
Response: Offer ID
Input: Offer ID
Response: Confirmation
Service Name: searchOffer
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Input: Search Criteria
Response: List of Offer ID and Descriptions
DSS 40(2005) 15
Web Services for Bargaining –
Contract Template
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Service Name: searchContractTemplate
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Service Name: downloadContractTemplate
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Input: Search Criteria
Response: XML Contract Template Summaries
Input: Contract Template ID
Response: XML Contract Template
Service Name: uploadContractTemplate
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Input: XML Contract Template
Response: Contract Template ID
DSS 40(2005) 16
Bargaining e-Negotiation Process (2)
Formulate Plan and Make Offer and Counter Offer
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Based on offers and contract template
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Evaluation of several variables and of several values per variable
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Need to take in account of the dependencies among the issues
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Deciding the order of negotiation
Trade-off evaluation of inter-dependent issues
Negotiate:
Unit price, Quantity,
Delivery date
Negotiate:
Payment terms,
Deposit
Negotiate:
Return policy
Compute
Freight
Negotiate:
Who pay freight
/ insurance
Check Insurance
Premium
DSS 40(2005) 17
Derivation of Negotiation Plan
{facilities provision, lease period, basic rent}
{start date, additional fee1}
{management fee inclusion,
additional fee2}
{numOfMonths}
Landlord
{rent}
start date
{deposit}
lease
period
facilities
provision
additional
fee1
basic rent
Partial
ordering of
variables
(sets)
mgt fee
inclusion
rent
additional
fee2
Tenant
deposit
numOfMonths
DSS 40(2005) 18
Web Services for Bargaining –
Contract Template & Negotiation Plan
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Service Name: downloadNegotiationPlan
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Input: Contract Template ID
Response: XML Negotiation Plans in the Repository for the
specified contract template
Service Name: uploadNegotiationPlan
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Input: Contract Template ID, XML Negotiation Plan
Response: Negotiation Plan ID
DSS 40(2005) 19
Make Offer and Counter Offer
[acceptance received]
[ready to make an offer]
Identify the
issue(s) to be next
negotiated in the
plan
Prepare
reservation
prices
Have all
issues been
negotiated?
Evaluate offer /
counter-offer
[unacceptable prices]
[false]
Quit?
[acceptable prices]
Notify
counterparty
of acceptance
[false]
Revise
reservation
prices
Make offer /
counter-offer
[counter-offer
received]
[offer received]
start a new
negotiation
cycle
[failure received]
[true]
Notify
counterparty
of failure
[true]
Successful
negotiation
DSS 40(2005) 20
Web Services for Bargaining –
Make Offer and Counter Offer
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Service Name: initNegotiationSession
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Service Name: updateNegotiationSession
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Input: Offer ID Responded to, Negotiation Plan ID,
Counteroffer Template Variable Values, Comments
Response: Session ID
Input: User ID, Session ID, Counteroffer Template Variable
Values, Comments
Response: Outstanding Variables Not Agreed or Successful
Negotiation
Service Name: abortNegotiationSession
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Input: Session ID
Response: Confirmation
DSS 40(2005) 21
Auction Process (1)
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Decide your offers
Select E-contract Template / Define Issues and Criteria
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price is usually the main and only issue for negotiation
quantity - when a lot of same items are sold
occasionally may involve multiple issues, using a scoring rule
(formula)
auction service or marketplace provider
define issues
and criteria
select e-Contract
template
for each
all issues
collection
derive variable have been
of co-related
mapped
relations
issue
[inconsistent]
formulate
plan
organize tasks
validate
consistency
[consistent]
make offers &
counter offers
creation of
e-Contract
[reach consensus
on all variables]
[quit]
DSS 40(2005) 22
Auction Process (2)
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Formulate Plan (specify the rules and parameter for the
bidding process)
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Format – Dutch or English auction, maximum rounds of bidding
(if any), deadline for last bid (if any), maximum time between
each bid (if any), whether bids are sealed or open, etc.
Rules of bidding – starting price, (minimum) price increment
for each bid (if any), reserve price (sealed or open), etc.
Administration – start time and location (physical location, or
URL in the case of electronic auction) of the bidding, entry fee
(if any), deposit (if any), penalty for bidder default (if any),
who may bid, etc.
DSS 40(2005) 23
Auction Process (3)
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Organize Task
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Important factor for the success of an action
Potential bidders have to be identified
Announcements and publicity to attract potential bidders
Carry out the planned admission procedures, such as
admitting and registering valid bidders, charging entry fee and
deposit (if any)
DSS 40(2005) 24
Auction Process (4)
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Make Offer and Counter Offer (i.e. the bidding race)
Received Valid Bid
Received Valid Bid
Wait for Next Bid
Time Out or
Exceeding
Max. round
(if any)
[Price too low]
Time Out
Fail
Compare with
Reservation Price
[Valid Final Price]
Success
DSS 40(2005) 25
Web Services for Auctions
that are different
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Service Name: placeNewAuctionOffer
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Service Name: placeAuctionBid
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Input: Item Description, Contract Template ID, Proposed
Template Variable Values, Additional Requirement List,
Auction Parameters
Response: Offer ID
Input: User ID, Session ID, Counteroffer Template Variable
Values, Comments
Response: Valid | Invalid
Consider the following services could be the same as
bargaining – withdrawOffer, seachOffer, those
regarding templates, etc.
DSS 40(2005) 26
Request for Proposals (RFP) (1)
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Select E-contract template / Define Issues and Criteria
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customer has some requirements, but with a lot of open
issues
rest of the contract template is to be constructed based on
the information from potential suppliers
define issues
and criteria
select e-Contract
template
for each
all issues
collection
derive variable have been
of co-related
mapped
relations
issue
[inconsistent]
formulate
plan
organize tasks
validate
consistency
[consistent]
make offers &
counter offers
creation of
e-Contract
[reach consensus
on all variables]
[quit]
DSS 40(2005) 27
Request for Proposals (RFP) (2)
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Decide your offer
Formulate Plan
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Identifies which issues and criteria to be disclosed to RFP
candidates
Identify specific candidates from directories, or identify some
criteria for open advertisement
Determine various administration procedures, such as
deadline, submission procedures, etc.
DSS 40(2005) 28
Request for Proposals (RFP) (2)
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Organize Tasks
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Similar to auction…
Make Offers and Counter Offers
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Candidate proposals before the deadline
Evaluates them according to the criteria previously defined
May need further interaction with the candidates for
clarifications
Shortlist / rank candidates, or directly select a successful one
By this time, the customer will have much more
understanding on the details of product/service requirements,
their issues, and thus also in the potential contract
Can negotiate further issues and criteria by following the
detail procedures of scenario 1 – bargaining
DSS 40(2005) 29
Web Services for RFP
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Service Name: placeNewRFP
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Input: Item Description, Contract Template ID, Proposed
Template Variable Values, Additional Requirement List
Response: Offer ID
Service Name: replyRFP
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Input: OfferID, Contract Template ID, Proposed Template
Variable Values, Additional Requirement List
Response: Accept | Reject | RevisedOfferID
DSS 40(2005) 30
Monitoring - Session Manager
DSS 40(2005) 31
NSS – Create Contract Template
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System
administrator
create new
contract
template by
entering
different
contract
template
variables
DSS 40(2005) 32
NSS - Grouping & Auxiliary Variables
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System administrator then input grouping and auxiliary
variables
DSS 40(2005) 33
NSS - Input Dependencies
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System administrator then input dependencies among groups / issues
DSS 40(2005) 34
Negotiation Based on Different Contract
Templates GUI (1)
DSS 40(2005) 35
Negotiation Based on Different Contract
Templates GUI (2)
DSS 40(2005) 36
UDDI Registry for the Prototype
Access URI
DSS 40(2005) 37
Sample Web Service
DSS 40(2005) 38
Conclusions
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An novel application of computer science techniques for a
management problem
A novel approach of e-Negotiation of contracts based on e-contract
template
A meta-model for e-Contract templates with the notion of template
variables and their dependencies
A flexible meta-model for e-Negotiation processes
Feasibility of designing various practical e-Negotiation processes
(viz., bargaining, auctions and request for proposals)
Derivation of effective and efficient negotiation plan
Application of contemporary Web Services technologies
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Facilitate rapid implementation for e-Marketplaces supporting the crossorganizational process
NSS supporting both human and computer access
DSS 40(2005) 39
Continuing and Future Work
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Contract template dependencies (Cheung et al 2002)
One-to-many contract negotiation
Ranking of different types of issues and criteria for tradeoff issues
Decision making to reach an optimal and stable state for negotiators
(Nash equilibrium)
Ontology support for negotiation
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E-marketplace
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D.K.W. Chiu, S.C. Cheung, P.C.K. Hung and H.F. Leung. Facilitating eNegotiation Process with Semantic Web Technologies, HICSS38, Jan 2005.
D.K.W. Chiu, J.K.M. Poon, W.C. Lam, C.Y. Tse, W.H.T. Siu, W.S. Poon.
How Ontologies Can Help in an E-marketplace, ECIS 2005, to appear.
Anonymity and Security
Real-life negotiation practice
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Integration of NSS / e-Marketplace with EIS
Request for proposals (particularly with semantic support)
DSS 40(2005) 40