1775: Negotiation on Rugged Landscapes: Explaining the Hidden Complexity That Drives Negotiation Impasses (16921)

Why do negotiations reach an impasse even when all parties benefit from agreements? While traditional explanations point to narrow zones of possible agreement (ZOPAs) or socio-cognitive reasons related to biases and incomplete information, our novel theory suggests another cause: the hidden inherent computational complexity of finding an agreeable solution. Specifically, even with a wide ZOPA and negotiators that are unbiased, rational, and collaborative, impasse can still occur when negotiators encounter proposals that are disproportionally beneficial to several parties but insufficient for collective agreement. We demonstrate our theory by formally modeling negotiations as a group search process within a "rugged landscape", where negotiators risk entrapment in suboptimal proposals despite the existence of agreement-inducing yet undiscovered alternatives. Our simulations reveal that narrow-ZOPA negotiations in rugged landscapes are more likely to lead to impasse than wide-ZOPA ones in smooth landscapes, challenging the traditional view that wider ZOPAs should facilitate easier agreements. They also confirm that increased ruggedness raises impasse rates across various parameter configurations while linking structural features of negotiation problems to ruggedness. Our study advances theory by highlighting the role of structural complexity and cognitive limitations in negotiation impasses and contributes an innovative theoretical framework that future empirical studies can build upon.

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