III. Efficiency Frontier

The basic theory underlying the optimization algorithms of negotiation support systems can be effectively illustrated using the efficiency frontier concept. As illustrated for a hypothetical case in Figure 1, the efficiency frontier represents the best possible outcomes for all parties in a negotiation case.

Figure 1 Efficiency Frontier

Every potential resolution in a negotiation problem is associated with an expected satisfaction level for each negotiating party. This figure illustrates a plot of the expected relative satisfaction of one party named Riverside against the expected relative satisfaction of another party named DEC. These parties are engaged in a hypothetical negotiation called DEC vs Riverside, which is used for illustration later in this paper. Very rarely can two negotiating parties both obtain 100% of what they want (top right corner as (100,100)). However, parties can almost always achieve more than 50/50 (center of graph). The efficiency frontier is a line defining the greatest level of joint satisfaction that parties can get in a particular negotiation (footnote 3).