Cultural Differentiation of Negotiating Agents

Negotiations proceed differently across cultures. For realistic modeling of agents in multicultural negotiations, the agents must display culturally differentiated behavior. This paper presents an agent-based simulation model that tackles these challenges, based on Hofstede’s model of national cultures. The context is a trade network for goods with a hidden quality attribute. The negotiation model is based on the ABMP negotiation architecture and applies a utility function that includes market value, quality preference and risk attitude. The five dimensions of Hofstede’s model are the basis for the modification of ABMP parameters and weight factors in the utility function. The agents can observe each other’s group membership and status. This information is used, along with the indices of Hofstede’s dimensions, to differentiate behavior in different cultural settings. The paper presents results of test runs that verify the implementation of the model. The model helps to explain behaviors of actors in international trade networks. It proves that Hofstede’s dimensions can be used to generate culturally differentiated agents. Further validations of the model with case studies from literature and experiments have yet to be conducted. Extensions can make this model a useful tool for training traders who engage in cross-cultural negotiation and for implementation in negotiation support systems.