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Electronic Commerce & Agents Frank Dignum Utrecht University dignum@cs.uu.nl Overview Historical overview Definition of Electronic Commerce (EC) Examples of EC Electronic markets and auctions Agents The role(s) of agents in EC Conclusions Historical perspective (Big) calculators

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Electronic Commerce & Agents

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Electronic commerce agents l.jpg

Electronic Commerce & Agents

Frank Dignum

Utrecht University

dignum@cs.uu.nl


Overview l.jpg

Overview

  • Historical overview

  • Definition of Electronic Commerce (EC)

  • Examples of EC

  • Electronic markets and auctions

  • Agents

  • The role(s) of agents in EC

  • Conclusions


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Historical perspective

  • (Big) calculators

  • Central databases

  • distributed information and word processing

  • client/server connected databases

  • support of (administrative) internal processes (WFMS)


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Historical perspective

  • Support of internal communication (groupware)

  • Knowledge management

  • Support of external communication (Internet & WWW)

  • Support of external processes (Electronic commerce)


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Definition (?)

Electronic Commerce is:

Any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact


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Commerce

Information exchange

Product/service/… exchange


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Information exchange

  • Partner/product search

  • negotiation, market, auction

  • contract

  • contract fulfilment (directives)

  • legal information

  • etc.


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Product/service exchange

  • (micro-)payment

  • (intangible) product

  • logistics of products and services

  • subscription mechanisms


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Stages of Business Transactions


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Support for stages


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business

Consumer

Public agencies

business

12/22


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EC Applications

  • Supply chain management

  • Home shopping

  • Remote banking

  • On-line marketing and advertising

  • Distant learning

  • Procurement and purchasing

  • Video on demand


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Examples of EC (B-C)

  • Retail

    • Internet bookshop

    • CDNow

    • Shopping malls

    • Auctions

    • Collective buying


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Item watching at e-bay now


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Examples of EC (B-C)

  • Finance

    • ESI (stock market)

    • Electronic banking


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Publishing


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Examples of EC (B-B)

  • Business to business support

    • Maxtrad (business information)

    • MEMO (Mediating and Monitoring EC)

    • Secure contracts (ICC)

    • Bolero (electronic document support)

  • Markets

    • Automotive industry (collective buying)

    • Retail world

    • Insurance private exchange of virtual products


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Role of institutions

  • Facilitate the transactions

    • Provide efficient price discovery mechanism

    • Provide standard transaction protocols

    • Provide settlement mechanisms

  • Enhance trust through

    • Provision of info on potential partners

    • Legal provisions to back up contracts

    • Provide securities/guarantees

    • Provide regulations on behaviour during transactions and means to enforce them


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Infrastructure for electronic markets

  • Banking facilities

  • Communication

    • confidentiality

    • integrity

    • authentication

    • non-repudiation

  • Transfer and storage of products

  • Advertising


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Banking facilities

  • Different payment methods should be supported

  • Payment should be safe

  • Payment and delivery guaranteed


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Communication

  • Some common language should be used.

  • Constructs in the language should have a precise and formal meaning.

    • Note: currencies should be clear

  • Contracts should be legally binding.

    • Obligations should be visible


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Storage and transfer of goods

  • Physical products can be sold only once. Their digital representation can easily be copied and sold more than once.

  • Downloading of digital products should be possible.

  • Transport should be arranged for other products.


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Advertisement

  • How is advertisement arranged?

    • Blackboard?

    • Shopping mall?

    • One-on-one advertisement allowed?

  • Format of advertisements?

  • Payed advertisements?

  • Who can advertise?


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Types of markets

  • Direct transactions

    • shopping mall

    • classified ads

    • direct negotiation

  • Brokered transactions

    • distributors

    • brokers

      • auctions


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Types of markets II

  • Direct transactions

    • direct contact buyer and seller

    • less structured transactions

    • influence market (institution) smaller

  • Brokered transactions

    • controlled contact between buyer and seller

    • transaction protocol very strict

    • institution has total control


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Auctions

  • Only “negotiate” about price.

  • Fixed:

    • product specification

    • payment method

    • transport

    • delivery terms

    • etc.


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Auctions

  • Sealed auctions

    • First priced sealed bid

    • Vickrey

    • Sealed double auction

  • Open auctions

    • Dutch auction

    • English auction


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First price sealed bid

  • Rules (protocol):

    • Bidders submit a single sealed bid before deadline

  • Outcome:

    • Winner is highest bid at bid price

  • Optimal strategy:

    • Bid just below private value of item

    • With N bidders bid: v(N-1)/N


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Vickrey

  • Rules (protocol):

    • Bidders submit a single sealed bid before deadline

  • Outcome:

    • Winner is highest bid at second highest price

  • Optimal strategy:

    • Bid private value of item


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Sealed double auction

  • Rules (protocol):

    • Bidders and sellers submit a single sealed bid before deadline

  • Outcome:

    • Auctioneer determines a single market-clearing price and matches buyers and sellers

  • Optimal strategy:

    • Bid private value of item


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Dutch auction

  • Rules (protocol):

    • Auctioneer calls out descending price.

    • Bidder calls out a bid

  • Outcome:

    • Winner is first bidder to call out at price bid

  • Optimal strategy:

    • Bid just below private value of item


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English auction

  • Rules (protocol):

    • Bidders successively raise bid for item until one bidder remains

  • Outcome:

    • Winner is last bidder remaining at price of second-highest bidder

  • Optimal strategy:

    • Bid until private value of item, then drop out


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Non-private value auctions

  • Value of item depends at least partly on the value others give it.

    • Resellable products (tasks)

    • treasury bills

  • Strategy now also depends on expectation or knowledge of the value others give the product.


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Other issues on auctions

  • Bidder collusion

  • Lying auctioneer

  • Interrelated auctions


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Examples of auctions

  • http://www.wehkamp.nl/Veiling/

  • http://www.ebay.com/aw/

  • http://www.onsale.com/

  • http://www.band-x.com/

  • http://www.auctionconnect.lycos.com/


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Technologies in EC

  • EDI

  • WWW

  • Multimedia

  • Work Flow Management

  • Agents

  • Electronic payment, smart cards, etc.

  • ...


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Agents

  • Agent properties:

    • autonomous

    • pro-active

    • reactive

    • social ability

    • learning

  • Agent functions:

    • information gathering and filtering

    • negotiation (simple like auction or ContractNet)

    • monitor long-term processes


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Agents and electronic commerce

  • Agents for support:

    • information gathering and comparison (e.g. shopbots: firefly)

    • logistics

  • Agents as delegates:

    • only when trust is not important or easy

    • Price and risk are low

    • Process well defined


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Agent operated markets

  • http://auction.eecs.umich.edu/

  • http://www.iiia.csic.es/Projects/fishmarket/

  • Stock market

  • Power trade


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Agents for negotiation

  • Limited use due to complexity, but

  • Very useful for e.g. auctions with:

    • “Simple” world model

    • Predetermined interactions

    • Fixed rules

    • One shot relations

    • centralised infrastructure


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Agents for negotiation

Fully automated AMEC first in situations where:

  • Interactions are fast

  • Interactions are repeated

  • Trade is of relative small value

  • Process is repeated over long periods

  • Products are easy to specify

    Examples: stock trade, power trade and telecom


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Item watching at e-bay now


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Item watching with agents

  • Agent watches auctions in which you are interested

  • Agent warns when your bid is overturned

  • Agent warns when it gets interesting to start bidding

  • Agent bid (strategically) up till a predefined level


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Conclusions

  • EC contains many, different aspects

  • EC is per definition multi-disciplinary

  • Agents can support in information seeking phase (now already)

  • Agents play a role in transactions when these are well defined and the need for speed or monitoring is high


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Vraag

  • Als ik mijn auto wil verkopen, kan ik hem dan beter op een Engelse veiling (boden lopen op) of een Nederlandse veiling (veilingmeester laat prijs dalen) aanbieden? Geef aan waarom.

  • Wat zou een agent op een Nederlandse veiling van bv. bloemen kunnen leren, waardoor hij in de loop van een ochtend beter gaat bieden? Welke informatie moet hij hiervoor bijhouden?


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