Personality Engineering with AI Agents: A New Methodology for Negotiation Research

Negotiation is a central mechanism of economic exchange, shaping markets, procurement, labor agreements, and resource allocation. It is also a canonical testbed for agentic language models, requiring multi-turn interaction under hidden preferences, strategic communication, and binding constraints. These properties make negotiation hard to evaluate: unlike math or code, it has no intrinsic verifier. Existing LLM negotiation evaluations rely on LLM-vs.-LLM interaction or aggregate outcomes such as deal rate, leaving failures opaque. We introduce Terms-Bench, short for Testbed for Economic Reasoning in Multi-turn Strategy, a Bayesian-game framework that makes the environment itself the verifier by specifying the counterpart's latent type, policy, and payoff structure. We instantiate it in bilateral price negotiation, where the counterpart's private state and simulator policy are hidden from the agent but observable to the evaluator. This turns the counterpart from a black-box opponent into a diagnostic instrument, enabling agent-attributable failure analysis and oracle-reference optimality gaps. Evaluating 13 LLM agents spanning frontier systems from major providers, Terms-Bench turns negotiation evaluation from aggregate ranking into actionable diagnosis: where agents fail, why they fail, and what to strengthen. Empirically, frontier models saturate deal rate yet diverge in surplus extraction, cue use, belief calibration, and compliance, revealing agent-specific bargaining bottlenecks masked by prior benchmarks.

Conversational AI promises a new kind of preparation for high-stakes workplace negotiations -- personalized, interactive, and capable of simulating realistic resistance. That promise is intuitive. We built Trucey, a theory-driven coaching system, to test it. The system encoded four assumptions: that articulation supports clarification, that personalization builds strategic competence, that chunked delivery reduces cognitive load, and that structured scaffolding removes metacognitive burden. A pre-registered experiment (N=267) and interviews (N=15) complicated each of them. Notably, the static handbook we included as a passive control outperformed both AI conditions on empowerment and usability. We reflect on why: each assumption encoded a specific model of how preparation unfolds, and the findings revealed that conversational AI imposes a linear execution model on a task that is fundamentally recursive. We identify an unexamined scope condition on established HAI design guidelines and close with a sequencing principle -- map before path, path before simulation -- for future AI coaching design.

Negotiation is a demanding social task for LLM agents, requiring strategic reasoning, persuasion, and interpersonal adaptation. Yet existing benchmarks often treat agents as emotionally neutral, overlooking a key driver of human bargaining behavior. We study how prompt-conditioned emotions affect LLM-based price negotiation. In a controlled framework, buyer and seller agents are independently assigned one of six emotional states and negotiate over 350 real consumer products under two budget conditions. Across 36 emotion-pair settings and five widely used LLMs, we find that emotions strongly shape outcomes. Angry buyers almost never reach agreement (0.39% deal rate), while happy buyers agree most often (28.91%), but obtain worse prices than fearful buyers. Emotion effects are role-dependent: buyer emotion mainly drives acceptance and rejection, whereas seller emotion shapes concession dynamics. These effects influence not only language, but also termination behavior and price trajectories, raising concerns for emotion-conditioned agents in commerce.