Zeuthen Strategy - Risk

Risk

\text{Risk}(i,t)= \begin{cases} 1 & U_{i}(\delta(i,t))=0 \\ \frac{U_{i}(\delta(i,t))-U_{i}(\delta(j,t))}{U_{i}(\delta(i,t))} & \text{otherwise} \end{cases}


Risk(A,t) is a measurement of agent A's willingness to risk conflict. The risk function formalizes the notion that an agent's willingness to risk conflict is the ratio of the utility that agent would lose by accepting the other agent's proposal to the utility that agent would lose by causing a conflict. Agent A is said to be using a rational negotiation strategy if at any step t + 1 that agent A sticks to his last proposal, Risk(A,t) > Risk(B,t).

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