AI, Computer Science, and the Changing World of Negotiation
A quick word first
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The state of the art
Last spring I negotiated with two avatars. It was in a simulation designed by Mursion, a San Francisco-based company that that uses computer-based technology to help people improve their interpersonal skills.
I met with Max (my boss, on the left) and Grant (from HR) in hopes of negotiating a promotion and raise. Max and Grant agreed that I’ve been doing an outstanding job but asked how dare I ask for an increase, when the company was freezing salaries and laying other people off.
© Mursion
The experience was weird—extremely so—for the first thirty seconds, but then somehow or other I got deeply engaged in the process. My MBA students who tried it had the same reaction. All of them said it was more realistic than doing exercises with classmate who they know is just pretending to play a role. Dealing with a stranger made the learning much more powerful for them.
I met Max and Grant thanks to a virtual conference I helped organize last spring on AI, Technology, and Negotiation. It was sponsored by the Program on Negotiation at Harvard Law School. The panelists included computer scientists, entrepreneurs, as well as my fellow negotiation teachers and researchers. We went far beyond technology for classroom use. Our goal was mapping current developments in this realm and assessing what’s on the near horizon, for better or worse.
You can read the panel descriptions and see videos of the sessions on the conference website at no charge. There also may be open access to the special conference issue of the Negotiation Journal for a limited time. Much of what we saw and discussed was fascinating. Other things were troubling.
Negotiating online versus face-to-face
Shopping at Macy’s or other big stores, do you ever try to negotiate a better price with a salesclerk? How about bargaining online?
Two years ago, Consumer Reports published an article called “The Many Benefits of Online Haggling.” Its survey of 56,000 readers found that 69 percent of online customers who tried to bargain for a better price succeeded, compared to 59 percent of the instore buyers. Moreover, the discounts for online hagglers were 10 percent larger than those of the brick-and-mortar customers.
What’s the online advantage? It could be that online customers are a different breed than those in-store. And being assertive may be easier if you’re interacting remotely. From the sellers’ perspective, if you’re online, they know that you can comparison shop with a click of your mouse.
Flip that, though. The sellers have leverage, too. When you’re shopping on a website, thanks to be big data the retailer knows more about your tastes and maybe even what’s in your wallet. (Some popular clothing companies bump up their prices for people with upscale zip codes.)
On top of that, you might not even be dealing with a real person. It could be an automated chatbot. The more sophisticated ones digest your language and analyze the pattern of your offers. Some even monitor how you type on your keyboard to monitor your mood.
© Ike Whitehead
Advantage seller? Maybe not. You now have the advantage of fighting fire with fire. Another San Francisco company, Trim, advertises that it can negotiate on your behalf for lower fees for internet and TV service, subscriptions, car insurance, and more.
Discrimination
Some transactions nowadays are entirely online, with no face-to-face option. Being online doesn’t eliminate social bias. It may actually exacerbate it.
In Airbnb’s early days one of its biggest challenges was building trust between would-be guests and hosts. Guests wanted assurance that the place they were visiting would be safe and well kept up. Owners, in turn, wanted to be sure people coming in would be responsible. To build trust in both directions Airbnb personalized the sign-up process by requiring owners and guests alike to post their photos.
This may seem innocent at first blush. But my HBS colleague Mike Luca, along with other researchers, discovered how Airbnb’s platform prompts racial and gender discrimination. Specifically, they found that people of color, both guests and hosts, were rejected significantly more often than whites were. Also, for comparable lodgings, white hosts were able to charge 12 percent more than were others.
The problem isn’t unique to Airbnb or confined to race. At eBay male sellers get higher prices than do female sellers. Mike and Ray Fisman co-authored a Harvard Business Review article optimistically titled, “Fixing Discrimination in Online Marketplaces,” though the text itself is more cautious. Platform designers face hard choices in balancing the value of providing information (names and pictures) that fosters dealing making versus the way that information triggers bias, conscious or not. Unfortunately, there may be no easy solutions.
What’s next?
In coming months I’ll follow up with articles that take deeper look at particular technologies, their pros and their cons. On the upside there’s tech that helps negotiators craft agreements that leave both parties better off. There is also an array of platforms to help people resolve disputes before they escalate into costly lawsuits. On the downside, there are apps that support mischief—and worse. Jazz of Negotiation subscribers will be able to share their opinions and experiences in discussion threads.
In 1997 IBM’s supercomputer Deep Blue beat reigning world chess champion Garry Kasparov. Almost a quarter of a century has passed since then. So now, with so many advances in technology, can a supercomputer outperform the world’s best human negotiator?
The answer is no. Not yet. But we’re getting closer.
For a preview, check out IBM’s “Project Debater.” It may be a harbinger. I found all of it fascinating. If you only have a couple minutes, start at the 37:30 mark when the computer submits her closing argument in favor of publicly supported pre-schools. She marshals persuasive arguments, organizes them logically, and engagingly voices her position. Those same skills are just as important in negotiation.
Often, of course, negotiations are about much more than substance, the terms and conditions. Emotions come into play, and each party must make judgments about the other party’s feelings, intentions, and trustworthiness. Strategy comes into play, too. Technology is not quite there yet. Should we look forward to the day when the super-negotiator appears—or should we cower in fear?
Be careful what you wish for: Facebook developed an AI negotiator that taught itself how to lie and cheat.
Housekeeping
Just by signing up for Jazz of Negotiation, you’ll get free access to a full article, plus a shorter post 50 weeks a year, delivered by email. Paid subscribers get additional content: Q and A threads, videos, and from time to time short exercises, with more to come.
Please share the news with people in your network who’d like to sharpen their negotiation skills. It would be great, of course, if you can subscribe and support this venture yourself. Right now, there’s a special discount for “early adopters” who are on board by February 28.
Many thanks!
Mike