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An SLA/Contract is an agreement between a client and a service provider. It specifies desired levels of service and penalties in case of violations. The objective of this paper is to develop a mathematical model for the negotiation process before an agreement is reached. The model will be based on Game Theory models of signaling games. The idea is to try to capture the bargaining process that occurs when clients are offered not just a take-it-or-leave-it contract but also the opportunity for them to express their preferences via a counteroffer. Of course, many times this counteroffer does not meet the service provider preferences and that's how the bargaining begins.
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