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Electronic Commerce & Agents Frank Dignum Utrecht University

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Presentation on theme: "Electronic Commerce & Agents Frank Dignum Utrecht University"— Presentation transcript:

1 Electronic Commerce & Agents Frank Dignum Utrecht University

2 Overview Historical overview Definition of Electronic Commerce (EC) Examples of EC Electronic markets and auctions Agents The role(s) of agents in EC Conclusions

3 Historical perspective (Big) calculators Central databases distributed information and word processing client/server connected databases support of (administrative) internal processes (WFMS)

4 Historical perspective Support of internal communication (groupware) Knowledge management Support of external communication (Internet & WWW) Support of external processes (Electronic commerce)

5 Definition (?) Electronic Commerce is: Any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact

6 Commerce Information exchange Product/service/… exchange

7 Information exchange Partner/product search negotiation, market, auction contract contract fulfilment (directives) legal information etc.

8 Product/service exchange (micro-)payment (intangible) product logistics of products and services subscription mechanisms

9 Stages of Business Transactions

10 Support for stages

11 12/22 business ConsumerPublic agencies

12 EC Applications Supply chain management Home shopping Remote banking On-line marketing and advertising Distant learning Procurement and purchasing Video on demand

13 Examples of EC (B-C) Retail –Internet bookshop –CDNow –Shopping malls –Auctions –Collective buying

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18 Item watching at e-bay now

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20 Examples of EC (B-C) Finance –ESI (stock market) –Electronic banking

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23 Publishing

24 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

25 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

26 Infrastructure for electronic markets Banking facilities Communication –confidentiality –integrity –authentication –non-repudiation Transfer and storage of products Advertising

27 Banking facilities Different payment methods should be supported Payment should be safe Payment and delivery guaranteed

28 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

29 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.

30 Advertisement How is advertisement arranged? –Blackboard? –Shopping mall? –One-on-one advertisement allowed? Format of advertisements? Payed advertisements? Who can advertise?

31 Types of markets Direct transactions –shopping mall –classified ads –direct negotiation Brokered transactions –distributors –brokers auctions

32 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

33 Auctions Only “negotiate” about price. Fixed: –product specification –payment method –transport –delivery terms –etc.

34 Auctions Sealed auctions –First priced sealed bid –Vickrey –Sealed double auction Open auctions –Dutch auction –English auction

35 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

36 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

37 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

38 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

39 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

40 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.

41 Other issues on auctions Bidder collusion Lying auctioneer Interrelated auctions

42 Examples of auctions

43 Technologies in EC EDI WWW Multimedia Work Flow Management Agents Electronic payment, smart cards, etc....

44 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

45 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

46 Agent operated markets Stock market Power trade

47 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

48 Agents for negotiation Fully automated AMEC first in situations where: 1.Interactions are fast 2.Interactions are repeated 3.Trade is of relative small value 4.Process is repeated over long periods 5.Products are easy to specify Examples: stock trade, power trade and telecom

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52 Item watching at e-bay now

53 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

54 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

55 Vraag 1.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. 2.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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