The Enhanced TOPSIS with Application to the Evaluation of Negotiation Offers Outside Feasible Negotiation Space

The work aims to introduce an enhanced TOPSIS (Technique for Order of Preference by Similarity to Ideal Solution) method incorporating individual aspiration and reservation levels as reference alternatives for evaluating the decision matrix. The proposed algorithm can effectively be used in multi-issue negotiation support, allowing for the evaluation of negotiation offers outside the negotiation space. It includes scenarios where resolution levels of certain issues fall above the aspiration or below the reservation level. Two approaches for comparing such offers and reservation or aspiration levels identified in deterministic negotiation space are introduced—non-compensatory and compensatory. The latter approach replaces the distance used in the original TOPSIS mechanism with two notions of positive and negative deviations that measure how much an alternative outperforms or is outperformed by aspiration and reservation levels. A numerical example is provided to illustrate the application of an enhanced TOPSIS mechanism in the pre-negotiation preparation of the negotiation offer scoring system. Its major advantage, the stability of the scoring system for new offers submitted during the actual negotiation phase, is additionally assessed through a simulation study of deficiencies of classic TOPSIS.