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
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
Infrastructure for electronic markets Banking facilities Communication –confidentiality –integrity –authentication –non-repudiation Transfer and storage of products Advertising
Banking facilities Different payment methods should be supported Payment should be safe Payment and delivery guaranteed
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
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.
Advertisement How is advertisement arranged? –Blackboard? –Shopping mall? –One-on-one advertisement allowed? Format of advertisements? Payed advertisements? Who can advertise?
Types of markets Direct transactions –shopping mall –classified ads –direct negotiation Brokered transactions –distributors –brokers auctions
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
Auctions Only “negotiate” about price. Fixed: –product specification –payment method –transport –delivery terms –etc.
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
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
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
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
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
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.
Other issues on auctions Bidder collusion Lying auctioneer Interrelated auctions
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/
Technologies in EC EDI WWW Multimedia Work Flow Management Agents Electronic payment, smart cards, etc....
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
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
Agent operated markets http://auction.eecs.umich.edu/ http://www.iiia.csic.es/Projects/fishmarket/ Stock market Power trade
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
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
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
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
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?