For this week’s article, we’ve invited Habib Baluwala to discuss the value of negotiating bots. Habib is a University of Oxford Master’s and PhD graduate and is currently a Data Scientist for Soltius specialising in Artificial Intelligence.

Negotiations are a part of our everyday life. From negotiating with your boss for a higher salary to negotiating with your two-year-old to finish her food, negotiations dictate the big and small decisions of our lives. Negotiations require knowledge, linguistic expertise, tactic, and emotion. It is a part of our daily social interaction which makes it an inherently human/biological trait.

Well not so much anymore. Last year while attending the International Joint Conference on Artificial Intelligence (IJCAI) conference, I was introduced to a bot that could negotiate like a human. Yes, I witnessed a negotiating bot. It represents the next stage of development in the AI story because until now, most bots that we encounter are dumb, without reasoning, memory or ability to detect emotions.

Why Do We Need Negotiating Bots?

The act of negotiation is not an easy task. It is an art with a science behind it. The objective of a negotiation is not only to extract maximum value for yourself but also to convince the opponent that the deal is beneficial to him. This becomes extremely difficult in cases where the opponent’s preferences are not known. Complexity is further elevated if there are more than two negotiating parties involved. These difficulties make it an attractive market for automated agents.

1. Retail Applications

“In business, you don’t get what you deserve, you get what you negotiate”. This quote is applicable whether you are trying to negotiate prices with your suppliers or trying to negotiate prices with your customers. Currently, most businesses offer services based on fixed prices. These prices are not entirely based on production costs but also what consumers are willing to pay, i.e value-based pricing. With negotiating bots, businesses can personalize the prices for each customer and provide bargains to them. The value of a product will no longer depend on the seller but based an amount determined by negotiations.

2. Debt Collections

Many institutions like tax authorities, debt collection agencies need to negotiate debt restructures. But people in debt can be scared, angry or emotionally explosive which makes these tasks extremely sensitive task. If individuals know that they are negotiating with bots, it can ease their anxiety and may lead to results beneficial for both negotiating parties.

3. Personal Bots

For those not good at bargaining, personal negotiating bots can be a godsend. We can send it off to settle our next car deal (would love to see a bot deal with cars salesman), make travel reservations or find a good handyman.

Wolf In Sheep’s Clothing

But all new technology should be used with caution. Last year, Facebook developed two bots to negotiate with each other. The researchers wanted to make the bots competitive and self-serving. The results were excellent. The bots good negotiators but also excellent liars. The bots started showing interest in valueless items so that it can later compromise by conceding it. It seems that they learned the ultimate trick in negotiations.


By Habib Baluwala, Data Scientist at Soltius. The original article appeared here.


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