PRISMA: Preference-Reinforced Self-Training Approach for Interpretable Emotionally Intelligent Negotiation Dialogues

Emotion plays a pivotal role in shaping negotiation outcomes, influencing trust, cooperation, and long-term relationships. Developing negotiation dialog systems that can recognize and respond strategically to emotions is, therefore, essential to create more effective human-centered interactions. Beyond generating emotionally appropriate responses, interpretability -understanding how a system generates a particular emotion-aware response, is critical for fostering reliability and building rapport. Driven by these aspects, in this work, we introduce PRISMA, an interpretable emotionally intelligent negotiation dialogue system targeting two application domains, viz. job interviews and resource allocation. To enable interpretability, we propose an Emotion-aware Negotiation Strategyinformed Chain-of-Thought (ENS-CoT) reasoning mechanism, which mimics human negotiation by perceiving, understanding, using, and managing emotions. Leveraging ENS-CoT, we curate two new datasets: JobNego (for job interview negotiation) and ResNego (for resource allocation negotiation). We then leverage these datasets to develop PRISMA by augmenting self-training with Direct Preference Optimization (DPO), guiding agents toward more accurate, interpretable, and emotionally appropriate negotiation responses. Automatic and human evaluation on JobNego and ResNego datasets demonstrate that PRISMA substantially enhances interpretability and generates appropriate emotion-aware responses, while improving overall negotiation effectiveness 1 .