Agent Mediated Electronic Commerce

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Agent Mediated Electronic Commerce

• Dr. Chris Preist
• HP Labs

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The Three Phases of Electronic Commerce

• Electronic Data Interchange
• Electronic Marketplaces
• Agent-Mediated Electronic Commerce

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Electronic Data Interchange (EDI)

• Business Partners electronically exchange trading
  documents in a pre-arranged format.
• Advantages
• Reduced paperwork, faster transactions, easy to
  automate.
• Disadvantages
• Lock-in to small number of business partners.

Purchase order
Purchaser
Supplier
Invoice
Payment
4
Electronic Markets

• Many potential trading partners meet and
  negotiate at an internet site.
• Advantages
• Very flexible. More competition, leading to
  better deals.
• Disadvantages
• Not automated, so slower and more
  labour-intensive than EDI.

Seller
Buyer
E-Market
Buyer
Seller
Buyer
Seller
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Agent-Mediated Electronic Commerce
Agents represent buyers and sellers, and can
participate in many Electronic markets.
Agent
E-Market
Buyer
Auction
Agent
Seller
Advantages Best of both worlds Flexible but
automated.
Disadvantages Technology not yet widely accepted.
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The Stages of E-Commerce

• Matchmaking
• Negotiation
• Contract Fulfilment

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Matchmaking
Directory Service
List of contacts
Request
Buyer Agent
Purchase goal
Buyer
8
Negotiation
Seller Agent
Buyer Agent
Seller
Buyer
A
Auction
A
A
E-Market
A
A
A
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Negotiation
Contract
Buyer Agent
Seller Agent
Seller
Buyer
10
Contract Fulfilment
Payment
Buyer Agent
Seller Agent
Seller
Buyer
Service delivery
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Key Technologies for AMEC

• Interoperability Standards
• Intelligent Algorithms

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Interoperability Standards

• Service Description Language
• An agreed way of describing goods being traded,
  and the resulting contracts. (e.g. DAML-S)
• Communication Language
• A set of messages with agreed meaning. (e.g. FIPA
  ACL)
• Communication Protocol
• An agreed set of rules stating who can send what
  kind of messages, when. (e.g. English Auction)

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Intelligent Algorithms

• How to negotiate with many other agents
  simultaneously, to reach a good deal (specified
  in an agreed contract).
• How to manage the interactions with other
  parties, according to the various contracts you
  have entered into.

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NEGOTIA The Problem Tackled

• Corporate Procurement spends most of its time and
  effort managing relatively low cost/value
  purchases.
• To be competitive, these purchases potentially
  require simultaneous negotiations with many
  sellers.
• Can we automate these effectively, leaving the
  human experts to focus on the important deals?

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The NEGOTIA System

• Negotia manages all of the simultaneous
  negotiations necessary to fulfil a purchase.
• Negotia can participate in multiple 11
  negotiations and/or multiple auctions. It
  deploys individual agents in each.
• Negotia computes the best spread of goods across
  different sellers.
• To do this, it considers different possible
  future scenarios.
• Negotiation terminates when Negotia has either
  completed the overall purchase goal or there are
  no further options to pursue.

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How NEGOTIA works

• Historical data are used to build a belief model
  of the market keyed on specific goods and
  suppliers.
• The belief model is a probabilistic estimate of
  the outcome of each negotiation and/or auction.
• Negotia computes the best spread based on the
  belief model and current state of negotiations.
• Best spread is updated as negotiations proceed
  e.g. auctions close or 11 negotiations complete.
  
• Negotia coordinates the behaviour of a set of
  agents one for each negotiation or auction.
• The agent uses its beliefs together with the
  spread information to determine its bidding
  tactics.

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Contract Manager Problem Tackled

• A business can enter into many contracts with
  other parties.
• These contracts place the business under certain
  obligations and give it certain rights.
• If a business fails to meet obligations, it may
  be liable to sanctions.
• Contractual agreements are often divorced from
  day-to-day operational decisions.
• By providing automated decision support to
  contract management we can prioritise our
  obligations quickly and effectively.
• By linking to business automation software (e.g.
  Workflow) we can improve the quality of
  operational decisions.

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The CONTRACT MANAGER system

• The system sits on top of an existing B2B
  execution framework, such as a Workflow system.
• Contracts are defined (through negotiation) in a
  structured language of permissions, obligations
  and sanctions. E.g. When the seller receives
  100 from the buyer, they are obliged to ship the
  goods within 3 days.
• System contains a normative core able to reason
  about obligations. This decides which are
  currently active and which have the highest
  priority.
• System has a fulfilment module, which maps
  abstract obligations to (one or more) execution
  processes which are expected to fulfil the
  obligations.
• Different agents using the system communicate via
  the Contract Fulfilment Protocol to ensure that
  each agrees that obligations have been
  successfully met.

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contract formation
Contract
Buyer
Seller
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scheduling of enactment
Add contract and scheduleexecution
Buyer
Seller
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An obligation is pending
An obligation is pending. Its fulfilment is
triggered.
Buyer
Seller
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The processes are invoked
4. The processes to fulfil the obligation are
retrieved, and invoked on theexecution framework
Buyer
Seller
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The processes are executed
5. The processes are executed
Buyer
Seller
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The obligation is fulfilled
The obligation is fulfilled
Buyer
Seller
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Signals fulfilment
Signals the fulfilment of the obligation (CFP)
Buyer
Seller
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Acknowledge fulfilment
Acknowledge the fulfilment
Buyer
Seller
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Final Comments

• Agent Mediated Electronic Commerce aims to create
  a highly flexible, dynamic and automated business
  environment on the web.
• This vision may not be fully realisable either
  for technical or business reasons.
• Nonetheless, the technology currently being
  developed will increase automation, and reduce
  lock-in.