Zeuthen strategy

The Zeuthen strategy in <a href="/facts/Cognitive_science/8qoggl7r">cognitive science</a> is a negotiation strategy used by some <a href="/facts/Artificial_agents/8C2Q93Vw">artificial agents</a>. Its purpose is to measure the willingness to risk conflict. An agent will be more willing to risk conflict if it does not have much to lose in case that the negotiation fails. In contrast, an agent is less willing to risk conflict when it has more to lose. The value of a deal is expressed in its utility. An agent has much to lose when the difference between the utility of its current proposal and the conflict deal is high.
When both agents use the monotonic concession protocol, the Zeuthen strategy leads them to agree upon a deal in the negotiation set. This set consists of all conflict free deals, which are <a href="/facts/Individually_rational/SSMQLugI">individually rational</a> and <a href="/facts/Pareto_optimal/nMTdVPqy">Pareto optimal</a>, and the conflict deal, which maximizes the <a href="/facts/Nash_product/fjIrxKGS">Nash product</a>.
The strategy was introduced in 1930 by the Danish economist <a href="/facts/Frederik_Zeuthen/1RMn6o8a">Frederik Zeuthen</a>.

Zeuthen strategy open-in-new

Zeuthen strategy