So far in this book, we have studied negotiation using two approaches: strategic and heuristic. The strategic approach is a non-cooperative game-theoretic approach. There is, however, another possibility: an axiomatic approach. The axiomatic approach will be the main focus of this chapter. Among the three approaches, the strategic and heuristic ones are better suited to the design of negotiating agents. Nevertheless, we include this chapter in order to explain the key concepts that underlie an axiomatic approach and, in the spirit of the Nash program (Nash, 1953; Binmore, 1985; Binmore and Dasgupta, 1987), show that the outcomes of some of the strategic models of bargaining can be very close to the outcomes of some axiomatic models.

We begin by understanding the key differences between cooperative and non-cooperative games. Following this, we introduce some of the prominent axiomatic models for single and multi-issue negotiation and show how some of their outcomes relate to those of strategic models. In the end, we give a comparative account of the axiomatic and strategic approaches in terms of their similarities and differences.

11.1 Background

Game-theoretic analysis of negotiation can be done using one of two possible approaches: axiomatic or strategic. In the former approach, negotiation is modelled as a cooperative game, while in the latter, it is modelled as a non-cooperative game.