Practical secrecy-preserving,verifiably correct and trustworthy auctions

We present a practical protocol based on homomorphic cryptography for conducting provably fair sealed-bid auctions. The system preserves the secrecy of the bids, even after the announcement of auction results, while also providing for public verifiability of the correctness and trustworthiness of the outcome. No party, including the auctioneer, receives any information about bids before the auction closes, and no bidder is able to change or repudiate any bid. The system is illustrated through application to first-price, uniform-price and second-price auctions, including multi-item auctions. Empirical results based on an analysis of a prototype demonstrate the practicality of our protocol for real-world applications.     

Cheating in online auction – Towards explaining the popularity of English auction

Action frauds constitute largest part of all Internet frauds. Cheating is a kind of fraud that does not have direct evidences of its occurrence. We conduct theoretical studies as well as simulation experiments to find out the effect of cheating in three important types of auctions: English auction, first-price sealed-bid, and second-price sealed-bid auction. Our cheating environment consists of shill bidding, bid shading and false bidding in English, first-price and second-price auction, respectively. In the experiments ordinary bidders, bidders with the equilibrium bidding strategy, and cheaters compete with each other. Both theoretical and experimental results confirm that the equilibrium bidding strategies indeed increases the bidders’ expected utility. Therefore, it can be concluded that adoption of rational bidding strategies can combat cheating. It is found that most of the auction sites intuitively prefer English auction to other auction mechanisms. There is not much theoretical or experimental evidence to support such an intuition. We use honest bidder’s expected gain and honest seller’s revenue loss as a basis to compare these three important auctions types. The analysis of the results reveals English auction to be the most preferred mechanism from both honest buyer’s and honest seller’s point of view. This result can be used as an experimental evidence to explain the popularity of English auction over the Internet.     

How to obtain full privacy in auctions

Privacy has become a factor of increasing importance in auction design. We propose general techniques for cryptographic first-price and (M+1)st-price auction protocols that only yield the winners' identities and the selling price. Moreover, if desired, losing bidders learn no information at all, except that they lost. Our security model is merely based on computational intractability. In particular, our approach does not rely on trusted third parties, e.g., auctioneers. We present an efficient implementation of the proposed techniques based on El Gamal encryption whose security only relies on the intractability of the decisional Diffie—Hellman problem. The resulting protocols require just three rounds of bidder broadcasting in the random oracle model. Communication complexity is linear in the number of possible bids.     

Procurement Bidding in First-Price and Second-Price,Sealed-Bid Auctions within the Common-Value Paradigm

Within the common-value paradigm, I examine the magnitude of the differencein expected outcome between first-price and second-price, sealed-bid auctions.I limit myself to two empirical specifications of bidders' signals: Weibulland normal distribution. The optimal bid functions and the expected procurer'scost under both auction formats are derived. Simultions are undertaken toanalyze the impact that random draws of signals have on the differences inoutcome from the two auction formats. Using estimates from structuralestimation in previous empirical work on first-price auction data, whereWeibull and normal distributions of signals have been applied, thehypothetical expected gain from switching from a first-price, sealed-bidauction to a second-price, sealed-bid auction mechanism is computed.     

Incremental learning framework for real‐world fraud detection environment

For detecting malicious bidding activities in e‐auctions, this study develops a chunk‐based incremental learning framework that can operate in real‐world auction settings. The self‐adaptive framework first classifies incoming bidder chunks to counter fraud in each auction and take necessary actions. The fraud classifier is then adjusted with confident bidders' labels validated via bidder verification and one‐class classification. Based on real fraud data produced from commercial auctions, we conduct an extensive experimental study wherein the classifier is adapted incrementally using only relevant bidding data while evaluating the subsequent adjusted models' detection and misclassification rates. We also compare our classifier with static learning and learning without data relevancy.     

The design and implementation of a secure auction service

We present the design and implementation of a distributed service for performing sealed bid auctions. This service provides an interface by which clients, or “bidders”, can issue secret bids to the service for an advertised auction. Once the bidding period has ended, the auction service opens the bids, determines the winning bid, and provides the winning bidder with a ticket for claiming the item bid upon. Using novel cryptographic techniques, the service is constructed to provide strong protection for both the auction house and correct bidders, despite the malicious behavior of any number of bidders and fewer than one third of the servers comprising the auction service. Specifically, it is guaranteed that: bids of correct bidders are not revealed until after the bidding period has ended; the auction house collects payment for the winning bid; losing bidders forfeit no money; and only the winning bidder can collect the item bid upon. We also discuss techniques to enable anonymous bidding     

A graphical formalism for mixed multi-unit combinatorial auctions

Mixed multi-unit combinatorial auctions are auctions that allow participants to bid for bundles of goods to buy, for bundles of goods to sell, and for transformations of goods. The intuitive meaning of a bid for a transformation is that the bidder is offering to produce a set of output goods after having received a set of input goods. To solve such an auction the auctioneer has to choose a set of bids to accept and decide on a sequence in which to implement the associated transformations. Mixed auctions can potentially be employed for the automated assembly of supply chains of agents. However, mixed auctions can be effectively applied only if we can also ensure their computational feasibility without jeopardising optimality. To this end, we propose a graphical formalism, based on Petri nets, that facilitates the compact represention of both the search space and the solutions associated with the winner determination problem for mixed auctions. This approach allows us to dramatically reduce the number of decision variables required for solving a broad class of mixed auction winner determination problems. An additional major benefit of our graphical formalism is that it provides new ways to formally analyse the structural and behavioural properties of mixed auctions.     

Bidding strategies in online single-unit auctions: Their impact and satisfaction

Online bidders use different strategies in their biddings. However, we are unsure of the bidders strategies and their effectiveness in achieving auction goals. Our study was an attempt to identify bidding strategies empirically in online single-unit auctions and evaluate their outcome in terms of cost saving, perceived bidder enjoyment, and bidder satisfaction. A research model was developed and used to examine the relationships. Both objective and subjective data of online single-unit auctions were collected from Taobao.com to validate our postulated hypotheses. We found three main bidding strategies: early, snipe, and agent-supported ratchet bidding based on their behavior patterns. These resulted in different levels of winning outcome and cost saving, but had no significant effect on perceived enjoyment. The hypotheses of the relationship between auction outcomes and bidder satisfaction of their bidding strategies were confirmed.     

A virtual competition auction model for perishable products

Online auctions for perishable products have tremendous potentials. However, the current forms of online auctions do not take full advantages of information technology enabled online auctions, and are ineffective for online auctions for perishable products. This study proposes a virtual competition auction model for perishable products. In virtual competition auctions, the bidder is provided with auction historical data, and the bidder’s decision is represented by a demand curve that is composed of a series of bids. A preliminary laboratory experiment based on a prototype of virtual competition auction system is reported. The preliminary laboratory experiment result shows that the virtual competition auction model for perishable products is more effective than the ordinary open-cry auction model.     

一个基于知识证明签名的安全电子拍卖协议

论文研究了英式电子拍卖协议,基于知识证明签名给出一个安全有效的电子拍卖协议。该协议实现了竞拍者身份的匿名性、获胜竞拍者的不可否认性、可公开验证性、竞拍者不可伪装性、可跟踪同一拍卖中某竞拍者的投标以及某个竞拍者在不同拍卖中不可关联性等问题。论文的工作重点是引入了可信第三方并利用知识证明签名来解决其它协议中撤消竞拍者的问题,可简单地撤消某个竞拍者并保证拍卖的高效率。另外,本文还给出了避免拍卖管理者的不公正性的改进协议。     

IntelliBid: An Event-Trigger-Rule-Based Auction System over the Internet

This paper presents the design and implementation of an Event-Trigger-Rule-Based auction system called IntelliBid. A network of Knowledge Web Servers, each consisting of a Web server, an Event-Trigger-Rule (ETR) Server, an Event Engine, a Knowledge Profile Manager, and Bid Servers and their proxies constitutes IntelliBid. Together, they provide auction-related services to the creator of an auction site and the bidders and suppliers of products. IntelliBid offers a number of desirable features. First and foremost is the flexibility offered to bidders for defining their own rules to control their bids in an automatic bidding process, which frees the bidders from having to be on-line to place bids. By using different rules, the bidders can apply different bidding strategies. Second, it furnishes valuable statistical information about past auctions to both suppliers (or sellers) and bidders. The information can assist a bidder in bidding and a seller in setting a reasonable base price and/or the minimum incremental price. Third, since rules that control the automatic bidding are installed and processed by the ETR servers installed at bidders' individual sites, bidders' privacy and security are safeguarded. The statistical information that is released by IntelliBid only depicts the trend of the bidding prices of a product. The information about bidders is kept completely secret, thus safeguarding the privacy of the bidders. Fourth, IntelliBid's event, event filtering and event notification mechanisms keep both bidders and suppliers timely informed of auction events so that they or their software system can take the proper actions in the auction process. Fifth, any registered user of IntelliBid, bidder or supplier, can monitor the bids placed to any product being auctioned in IntelliBid. Sixth, IntelliBid allows bidders to do both on-line (or manual) bidding and automatic bidding. It also allows a bidder to participate in several auctions at the same time, in both manual and automated modes. The bidding of a product can depend on the result of the bidding of another product. Last, but not least, IntelliBid allows a person or organization to play both the role of bidder and the role of supplier simultaneously. The Profile Manager keeps the information as a bidder and information as a supplier separately. Moreover, IntelliBid's architecture uses a parallel event management system to do event registration and notification. This paper also reports the result of a performance study on the implication of using such a parallel system to achieve scalability.     

Bidding behavior in dynamic auction settings: An empirical analysis of eBay

We study the impact of dynamic environment of eBay auctions on bidding behavior. Due to high-speed Internet and practically costless search possibilities, bidding behavior is no longer a function of characteristics of a single auction but depends on auctions running simultaneously, completed auctions, available Buy-It-Now prices as well as various outside options. We study how this dynamic market affects a bidder’s choice of participating in an auction or leaving eBay for an outside alternative. We analyze Texas Instruments (TI-83) Graphing Calculator auctions presented on eBay. We estimate a random-effects probit model to study bidders’ probability of staying in eBay, while controlling for unobservable individual-specific heterogeneity. Our main result shows that Market Tightness – the ratio of bidders to sellers – has a negative and significant effect on bidders’ decision to remain in eBay. Moreover, variables containing information from other eBay auctions significantly affect bidders’ participation decision, thus emphasizing the importance of the dynamic, multi-auction environment in eBay marketplace for potential buyers.     

Design of online auctions: Proxy versus non-proxy settings

Recent years have witnessed the rapid development of online auctions. Currently, some online auctions, such as eBay, introduce a proxy bidding policy, under which bidders submit their maximum bids and delegate to a proxy agent to automatically outbid other competitors for the top bidder, whereas other online auctions do not. This paper compares these two widely used auction mechanisms (proxy setting and non-proxy setting) and characterizes the equilibrium bidding behavior and the seller's expected revenue. We find the proxy auction outperforms the non-proxy auction in terms of the seller's expected revenue. This dominance result is not prone to the specific bid announcement policy, the bidder's knowledge regarding the number of bidders, the impact of traffic congestion along the bidding process, the number of items sold through the auction, and the existence of a reserve price.We further find that the proxy setting usually fails to sustain the truthful bidding as a dominant strategy equilibrium even if no minimum bid increments are adopted, and the possibility of a low-valuation-bidder dilemma where the low-valuation bidders could be better off if all bidders collude to bid at the last minute. We also discuss the dramatically different equilibrium bidding behaviors under the two auction mechanisms.     

Time dynamics of overlapping e-auction mechanisms: Information transfer, strategic user behavior and auction revenue

This paper investigates the time dynamics of user strategic patterns and resulting welfares in a series of overlapping multiple online auctions. An auction mechanism is a dynamic game where the valuation and strategic space of bidders determine the outcomes. When those mechanisms exist concurrently or in a series in a market environment, multiple sources are visible and accessible, such that there is likely to be a form of interdependency across the auctions. While heterogeneous bidder behavior has been studied in some literature, the focus is mainly on an individual auction level and the underlying dynamics regarding the interdependency across the auctions in the market has not been explained. We use a two-phased approach to address this discrepancy. First, we classify user strategy using k-means clustering. Then, we characterize the transition pattern of heterogeneous clusters using a dynamic systems framework. Long-term behavior of the system is effectively and efficiently predicted using system parameters. The empirically calibrated simulation, which supports the analytical properties, provides managerial insights in designing multiple overlapping online auction market.     

基于区块链的密封式投标拍卖方案

随着互联网技术的飞速发展,传统拍卖正逐渐转变为电子拍卖,其中隐私保护越来越受到关注。针对当前电子投标拍卖系统中出现的问题,如竞买人隐私存在被泄露的风险、第三方拍卖中心的费用昂贵、第三方拍卖中心可能与竞买人勾结等,提出一种基于区块链智能合约技术的密封式投标拍卖方案。该方案充分利用区块链的去中心化、防篡改和可信赖性等特征构建了一个无第三方的拍卖环境,并通过区块链上的安全保证金策略约束竞买人的行为,从而提高密封式电子拍卖的安全性。同时该方案利用Pedersen承诺保护竞买人的竞拍价格不被泄露,并通过Bulletproofs零知识证明协议验证中标价格的正确性。安全性分析和实验结果表明,提出的拍卖方案满足安全性要求,各个阶段的时间消耗均在可接受范围内,满足日常拍卖要求。     

Implications of a Reserve Price in an Agent-Based Common-Value Auction

Auction sellers can use a reserve price to require a minimum bid before items are sold. Theoretical and experimental research has tested the influence of a reserve price in an independent private values auction, but little focus has been given to the influence of a reserve price in a first-price common-value auction. We establish an agent-based first-price common-value auction to determine the impact of the reserve price with two buyers and with three buyers. An agent-based approach to this problem is both a unique contribution to the literature and appropriate since finding analytical solutions with common-value auctions is difficult. The agent-based model approach also allows us to consider buyers that have non-symmetric bid functions. Furthermore, we introduce a combination of numerical integration techniques with a new particle swarm learning algorithm. The buyers in the model choose their expected-net-revenue-maximizing bid price, and sellers choose their expected-revenue-maximizing reserve price. In the two-buyer and three-buyer auction, a reserve price increases the equilibrium winning bid price, decreases the probability that the item is sold, and increases the seller’s expected revenue. A reserve price in a two-buyer auction increases the winning bid price more than including an additional buyer in the auction with no reserve price. However, due to only receiving a salvage value when the item does not sell in the auction, the seller’s expected revenue is higher in the three-buyer first-price common-value auction without a reserve price than in the two-buyer auction with a reserve price.     

Auction design with costly preference elicitation

We consider auction design in a setting with costly preference elicitation. Well designed auctions can help to avoid unnecessary elicitation while determining efficient allocations. Careful design can also lead to more efficient outcomes when elicitation is too costly to permit perfect allocative efficiency. An incremental revelation principle is developed and used to motivate the role of proxied and indirect auction designs. Proxy agents, situated between bidders and an auction, can be used to maintain partial information about bidder preferences, to compute equilibrium bidding strategies based on the available information, and to elicit additional preference information as required. We derive information-theoretic elicitation policies for proxy agents under a simple model of costly elicitation across different auction designs. An experimental analysis demonstrates that indirect mechanisms, such as ascending-price auctions, can achieve better allocative efficiency with less preference elicitation than sealed-bid (direct) auctions because they promote better decisions about preference elicitation.A preliminary version of this paper appeared in the Proc. of the IJCAI’99 Workshop on Agent Mediated Electronic Commerce.     

What Format for Multi-Unit Multiple-Bid Auctions?

This paper uses computational experiments where bidders learn over nonlinear bidding strategies to compare outcomes for alternative pricing format for multi-unit multiple-bid auctions. Multi-unit multiple-bid auctions, in which bidders are allowed to submit multiple price-quantity bids, are promising mechanisms for the allocation of a range of resources. The main advantage of such auctions is to avoid the lumpy bid problem which arises when bidders can only compete on the basis of one bid. However, there is great uncertainty about the best auction formats when multi-unit auctions are used. The theory can only supply the expected structural properties of equilibrium strategies and the multiplicity of potential equilibria makes comparisons across auction formats difficult. Empirical studies and experiments have improved our knowledge of multi-unit auctions but they remain scarce and most experiments are restricted to two bidders and two units. Moreover, they demonstrate that bidders have limited rationality and learn through experience. This paper constructs an agent-based computational model of bidders to compare the performance of alternative procurement auction formats under circumstances where bidders submit continuous bid supply functions and learn over time to adjust their bids in order to improve their net incomes. The setting is for independent private values. We show that bidding behaviour displays more interesting patterns than is depicted in the theoretical literature and that bidding patterns depend on the interplay between heterogeneity in the bidder population and the degree of rationing in the auction. Results indicate that the three auction formats have similar performance for most levels of competition but that their performances differ when competition is weak. This ranking is dependent on whether the population of bidders is homogenous or heterogeneous.     

一个利用群签名的电子拍卖协议

利用群签名与可验证的秘密共享方案设计了一个新的密封投标的电子拍卖协议。在该协议中,多个拍卖者共同主持拍卖过程,所有的拍卖者通过可验证的秘密共享方案共享一个密钥,这使得投标者在投标时只需要一次加密,其计算量与拍卖者的数量无关;另外,中标者的身份是由群管理者根据中标者对投标消息的签名来确定的,所以一次注册后,投标者可同时参加多个拍卖活动,而不会泄露自己的身份。