What is AI negotiation
AI (Artificial Intelligence) is any entity/machine which is able to observe and sense the environment to make decisions in order to achieve its goals. The counter part of AI is natural intelligence, more specifically human intelligence. AI negotiation is a machine or mechanism that negotiates with human or other machines in order to achieve target outcomes. The weak version of AI negotiation is AI-assisted negotiation which allows human to be involved in the negotiation process.
The elements of negotiation
Negotiation of a key component of business. It is a complicated process, which inextricably involves human emotion, psychology as much as economic calculus. Machine traditionally handles calculation better than human. However, due to the advance of AI, machine is showing promising performance in interactions with human at emotional level.
The new trend of buyers behaviour in the property market
In 2015, the property market in Melbourne and Sydney received a wave of buyers from overseas, who were not familiar with the property transaction system or the property market in Australia. They did not form a clear value perception about a property before attending the auction. Their bidding behaviour was emotional and heavily linked with other bidders, who were often the same type of buyers. The result was that the property price skyrocketed due to their overbidding. Sellers were happy while buyers were trapped in the winner’s curse, only realised that they have paid too much after winning the bidding. The market price of a property very often deviated from its real value significantly. In that market environment, an auction with face-to-face competition seemed to work well for the sellers and real estate agents.
As buyers become more and more knowledgable about the property market, their behaviour is now more rational and reasonable than before. Overbidding becomes less common nowadays. The property price is now in line with its real value by and large. The change of the buyers behavirour certainly contributed to the property price correction over the past four years.
AI negotiation is now in a good position to achieve equally good results
As buyers are now rational, they are more inclined to make calculated decisions. Dealing with a rational market, AI certainly has a fair chance to outperform human in negotiation.
1. AI has superior calculation power to human. This makes possible fast/comprehensive information collection and processing.
2. AI has stable working performance, while human makes mistakes unavoidably.
3. AI is able to learn faster than human.
4. AI + online platform enables the implementation of optimal transaction algorithms.
RE Logic AI-assisted negotiation platform
RE Logic has developed a prototype of the AI-assisted negotiation platform. The core of the platform is a supervised machine learning algorithm. The algorithm aims to deliver the best outcome by closing a transaction using expressions of interest, first price sealed auction, private treaty or ascending English auction, etc, whichever is the most suitable. The transaction strategy is selected and optimised by the machine learning mechanism.
With great admiration for the work by DeepMind, following their naming tradition, we name our AI-assisted negotiation platform as AlphaNegotiate. The first version is AlphaNegotiate 1.0.
To refine and commercialise our AI-assisted negotiation platfrom, RE Logic welcomes development partners to join us. To contact us, email: email@example.com.