How to select fair improving directions in a negotiation model over continuous issues

Empirical evidence suggests that in practice it is difficult to reach Paret o optimal agreements in negotiations. In this paper, we take a constructive approach to this question in two-party negotiations over continuous issues . A new negotiation procedure is presented that results in Pareto optimal a greements under fairly general assumptions. The procedure uses a mediator w ho assists the decision makers (DM's) by choosing jointly beneficial compro mises, The procedure has the appealing feature that the DM's are only requi red to answer relatively simple questions and their individual utility func tions need not be identified completely. Moreover, the DM's reveal minimal private information to the mediator, These are properties that we would hop e to have in practical procedures to be incorporated in operational negotia tion support systems.