Internet Auctions

1
Internet Auctions

• Manoj Kumar, Stuart I. Feldman
• Presented by
• Bhaskaran Raman

2
Overview

• Motivation
• Auction methods
• Security requirements
• Steps in auction process, Design
• Further Issues
• Comments Discussion
• ebay.com, auctionwatchers.com...

3
Motivation

• Why auctions?
• Best price, Guaranteed sale
• Why Internet auctions?
• Low overhead
• Will encourage auction of small purchases as well

4
Auction Methods

• Open-cry (English) auctions
• Sealed bid
• Dutch auctions

5
English Auctions

• Each buyer can hear all other bids
• Counter-bid within limited time
• Physical auctions within seconds
• Cyber auctions minutes/hours
• Requires bidders to collect at a place at a
  particular time

6
Sealed bid

• Does not require bidders to collect
• Buyers specify bid by a deadline
• Bids are secret until the deadline
• Auctioneer announces winner
• Single round - no bidding frenzy
• Multiple round addresses this

7
Dutch Auction

• Price goes down with time
• First bidder wins
• Appropriate for perishable goods
• Can control how fast the goods are sold

8
Variations

• Anonymity
• of bids, bidders, winning bid, amount of
  inventory
• Rules for ending
• time based
• based on minimum price (Dutch)
• Restrictions on bidding amount

9
Variations

• Discriminative/Yankee Auction
• winners pay what they bid
• Non-discriminative Auction
• winning bids pay the lowest winning bid (for sale
  of multiple similar items)
• Vickerey auction
• winner pays second highest bid

10
Properties

• Vickerey auction
• Encourages true valuations
• Revenue-Equivalence
• Vickerey, Dutch, Open cry, Sealed bid yield same
  revenue
• Given one item, bidders are risk neutral,
  valuations are independent, bidders know only
  their valuation

11
Security Requirements

• Registration of buyers/sellers
• Authentication/secrecy of bids
• Non-repudiation
• Preventing collusion
• Preventing shills

12
Steps in Auctioning

• Registration
• Set up an event
• Scheduling and advertising
• Bidding
• Evaluation
• Trade settlement

13
Design

• Object model (??)
• Auction, Buyer, Seller, Search, Trade, Message
• Process flow model (????)
• User Interface (??????)
• HTML, Say that its important
• Java - future work

14
Further Issues

• Choosing the right auction method
• Dutch for perishables
• Dutch discourages collusion
• Open cry preferred to sealed bid in the internet
• Bidding agents

15
Comments Discussion

• Just software design?
• Real issues not solved
• Security
• Non-repudiation
• Trust model
• Transactional property
• Fault tolerance issues

16
ebay.com

• Sellers buyers register
• Small consumer goods
• Sealed bid, Dutch
• No non-repudiation?
• Shills?
• ebay.com trusted

17
auctionwatchers.com

• Meta site
• Auction tracking of computer equipments
• onsale.com - Open cry auctions
• egghead.com
• Regn required credit card
• webauction.com