78_Electronic Auctions & Expressive Mechanisms

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Electronic Auctions &expressive mechanisms

- P. Haritha

12031J0078


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Agenda

Introduction

Various types of e-auctions

Benefits and limitations of e-auctions

Hazards of e-auction fraud and possible countermeasures

Auction protocol

Expressive mechanisms

06/Electronic auctions & expressive mechanisms


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Introduction

Formalized trading procedures in which the trading partnersinteraction is governed by specific trading rules.

Auctioneer will act as an intermediary.

The auction patterns vary with the trade objects and trade rule

Since the diffusion of the Web has gained momentum and thenumber of Web users is rising steeply Electronic marketsparticularly Electronic Auctions gaining demand.

Auction Protocols for ensuring different security properties



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What is an Auction?



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Types of auctions

Forward auction

An auction in which a seller offers a product to many potential buyers

Sealed-bid auction

Auction in which each bidder bids only once; a silent auction, in which

bidders do not know who is placing bids or what the prices are

Reverse auction

Auction in which the buyer places an item for bid (tender) on a request for

quote (RFQ) system, potential suppliers bid on the job, with the price reduc

sequentially, and the lowest bid wins



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Benefits of E-Auctions

Benefits to sellers

Larger reach and increased revenues Optimal price setting Lower transaction costs Lower administrative costs Better customer relationships

Benefits to buyers Opportunities to Find Unique Items and Collectibles

Lower prices Anonymity Convenience

Benefits to E-Auctioneers Higher repeat purchases A stickier Web site Expansion of the auction business



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Limitations of E-Auctions

Possibility of fraud

Limited participation

Security

Auction software

Equipment for buyers

Order fulfillment costs



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Types of E-Auction Fraud

Bid shielding

Having phantom bidders bid at a very high price when an auction begithey pull out at the last minute, and the real bidder who bid a muchlower price wins

Shilling

Placing fake bids on auction items to artificially jack up the biddingprice



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Cond

Fake photos and misleading descriptions

Improper grading techniques

Bid siphoningUsers send e-mail to bidders of a current auction to offer the samemerchandise for a lower price elsewhere

Failure to pay



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Protecting against E-Auction Fraud

User identity verification

Authentication service

Grading services

Feedback forum

Nonpayment punishment

Item verification

Buyer protections



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Rules

Buyers should get correct information.

Sellers should get the accountable bids.

Auctioneers must get to be trusted.



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Auction protocol

Different auction protocols have been designed to achieve

different goals and requirements

Some auction protocols based on the common rules

Some auction protocols based addressing the timing issue of

the internet auctions Every auction protocol have developed based on the well-known

algorithms or procedures like RSA,SSL, DES.



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Sealed Bid

Example :- U.S Govt used this to sell a Govt land.

Issues while developing the protocol

Time of disclosure is important.

Non-repudiation mechanisms to ensure payments collected from

the bid winners

Bidders to be anonymous



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Phases

Bidding secretly Opening and announcing winner

These process should ensure two properties

Validity : The auction eventually closes The winner will be announced based on publically known rule The money collected from the winner should be equal to his bidding amount

Looser bidders wont get any money or item. Only winning bidder can collect the item.

Secrecy : Identity of bidder and biddings wont revealed Anonymous bids allowed The messages between the bidders and sellers wont get interrupted or manipulated



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EXPRESSIVE MECHANISMS

Especially on the internet have begun allowing people ororganizations to express richer preferences in order to provide fgreater levels of overall satisfaction

Expressive mechanisms leads to increase in efficiency.

Combinatorial auction (CA)

This allows participants to express valuations overpackage

of items. multi-attribute settings

where the participants can express preferences over vectoof attributes of the itemor, more generally, of the outcom



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Conclusion

The Web has provided low-cost access to a global market space

and at the same time highly focused customer groups.

Cost-efficient communication infrastructures and low-cost mark

engines have enabled auctioneers to set up auctions quickly and

with limited investments.

Mechanisms for secure payments encourage customers to opt fo

Web auctions with electronic trade execution



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78_Electronic Auctions & Expressive Mechanisms

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