Internet Auctions Manoj Kumar, Stuart I. Feldman Presented by Bhaskaran Raman
Overview <ul><li>Motivation </li></ul><ul><li>Auction methods </li></ul><ul><li>Security requirements </li></ul><ul><li>St...
Motivation <ul><li>Why auctions? </li></ul><ul><ul><li>Best price, Guaranteed sale </li></ul></ul><ul><li>Why Internet auc...
Auction Methods <ul><li>Open-cry (English) auctions </li></ul><ul><li>Sealed bid </li></ul><ul><li>Dutch auctions </li></ul>
English Auctions <ul><li>Each buyer can hear all other bids </li></ul><ul><li>Counter-bid within limited time </li></ul><u...
Sealed bid <ul><li>Does not require bidders to collect </li></ul><ul><li>Buyers specify bid by a deadline </li></ul><ul><l...
Dutch Auction <ul><li>Price goes down with time </li></ul><ul><li>First bidder wins </li></ul><ul><li>Appropriate for peri...
Variations <ul><li>Anonymity </li></ul><ul><ul><li>of bids, bidders, winning bid, amount of inventory </li></ul></ul><ul><...
Variations <ul><li>Discriminative/Yankee Auction </li></ul><ul><ul><li>winners pay what they bid </li></ul></ul><ul><li>No...
Properties <ul><li>Vickerey auction </li></ul><ul><ul><li>Encourages true valuations </li></ul></ul><ul><li>Revenue-Equiva...
Security Requirements <ul><li>Registration of buyers/sellers </li></ul><ul><li>Authentication/secrecy of bids </li></ul><u...
Steps in Auctioning <ul><li>Registration </li></ul><ul><li>Set up an event </li></ul><ul><li>Scheduling and advertising </...
Design <ul><li>Object model (??) </li></ul><ul><ul><li>Auction, Buyer, Seller, Search, Trade, Message… </li></ul></ul><ul>...
Further Issues <ul><li>Choosing the right auction method </li></ul><ul><ul><li>Dutch for perishables </li></ul></ul><ul><u...
Comments & Discussion <ul><li>Just software design? </li></ul><ul><li>Real issues not solved </li></ul><ul><ul><li>Securit...
ebay.com <ul><li>Sellers & buyers register </li></ul><ul><li>Small consumer goods </li></ul><ul><li>Sealed bid, Dutch </li...
auctionwatchers.com <ul><li>Meta site </li></ul><ul><li>Auction tracking of computer equipments </li></ul><ul><li>onsale.c...
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  1. 1. Internet Auctions Manoj Kumar, Stuart I. Feldman Presented by Bhaskaran Raman
  2. 2. Overview <ul><li>Motivation </li></ul><ul><li>Auction methods </li></ul><ul><li>Security requirements </li></ul><ul><li>Steps in auction process, Design </li></ul><ul><li>Further Issues </li></ul><ul><li>Comments & Discussion </li></ul><ul><li>ebay.com, auctionwatchers.com... </li></ul>
  3. 3. Motivation <ul><li>Why auctions? </li></ul><ul><ul><li>Best price, Guaranteed sale </li></ul></ul><ul><li>Why Internet auctions? </li></ul><ul><ul><li>Low overhead </li></ul></ul><ul><ul><li>Will encourage auction of small purchases as well </li></ul></ul>
  4. 4. Auction Methods <ul><li>Open-cry (English) auctions </li></ul><ul><li>Sealed bid </li></ul><ul><li>Dutch auctions </li></ul>
  5. 5. English Auctions <ul><li>Each buyer can hear all other bids </li></ul><ul><li>Counter-bid within limited time </li></ul><ul><ul><li>Physical auctions: within seconds </li></ul></ul><ul><ul><li>Cyber auctions: minutes/hours </li></ul></ul><ul><li>Requires bidders to collect at a place at a particular time </li></ul>
  6. 6. Sealed bid <ul><li>Does not require bidders to collect </li></ul><ul><li>Buyers specify bid by a deadline </li></ul><ul><li>Bids are secret until the deadline </li></ul><ul><li>Auctioneer announces winner </li></ul><ul><li>Single round - no bidding frenzy </li></ul><ul><li>Multiple round addresses this </li></ul>
  7. 7. Dutch Auction <ul><li>Price goes down with time </li></ul><ul><li>First bidder wins </li></ul><ul><li>Appropriate for perishable goods </li></ul><ul><li>Can control how fast the goods are sold </li></ul>
  8. 8. Variations <ul><li>Anonymity </li></ul><ul><ul><li>of bids, bidders, winning bid, amount of inventory </li></ul></ul><ul><li>Rules for ending </li></ul><ul><ul><li>time based </li></ul></ul><ul><ul><li>based on minimum price (Dutch) </li></ul></ul><ul><li>Restrictions on bidding amount </li></ul>
  9. 9. Variations <ul><li>Discriminative/Yankee Auction </li></ul><ul><ul><li>winners pay what they bid </li></ul></ul><ul><li>Non-discriminative Auction </li></ul><ul><ul><li>winning bids pay the lowest winning bid (for sale of multiple similar items) </li></ul></ul><ul><li>Vickerey auction </li></ul><ul><ul><li>winner pays second highest bid </li></ul></ul>
  10. 10. Properties <ul><li>Vickerey auction </li></ul><ul><ul><li>Encourages true valuations </li></ul></ul><ul><li>Revenue-Equivalence </li></ul><ul><ul><li>Vickerey, Dutch, Open cry, Sealed bid: yield same revenue </li></ul></ul><ul><ul><li>Given: one item, bidders are risk neutral, valuations are independent, bidders know only their valuation </li></ul></ul>
  11. 11. Security Requirements <ul><li>Registration of buyers/sellers </li></ul><ul><li>Authentication/secrecy of bids </li></ul><ul><li>Non-repudiation </li></ul><ul><li>Preventing collusion </li></ul><ul><li>Preventing shills </li></ul>
  12. 12. Steps in Auctioning <ul><li>Registration </li></ul><ul><li>Set up an event </li></ul><ul><li>Scheduling and advertising </li></ul><ul><li>Bidding </li></ul><ul><li>Evaluation </li></ul><ul><li>Trade settlement </li></ul>
  13. 13. Design <ul><li>Object model (??) </li></ul><ul><ul><li>Auction, Buyer, Seller, Search, Trade, Message… </li></ul></ul><ul><li>Process flow model (????) </li></ul><ul><li>User Interface (??????) </li></ul><ul><ul><li>HTML, Say that its important </li></ul></ul><ul><ul><li>Java - future work </li></ul></ul>
  14. 14. Further Issues <ul><li>Choosing the right auction method </li></ul><ul><ul><li>Dutch for perishables </li></ul></ul><ul><ul><li>Dutch discourages collusion </li></ul></ul><ul><ul><li>Open cry preferred to sealed bid in the internet </li></ul></ul><ul><li>Bidding agents </li></ul>
  15. 15. Comments & Discussion <ul><li>Just software design? </li></ul><ul><li>Real issues not solved </li></ul><ul><ul><li>Security </li></ul></ul><ul><ul><li>Non-repudiation </li></ul></ul><ul><ul><li>Trust model </li></ul></ul><ul><ul><li>Transactional property </li></ul></ul><ul><ul><li>Fault tolerance issues </li></ul></ul>
  16. 16. ebay.com <ul><li>Sellers & buyers register </li></ul><ul><li>Small consumer goods </li></ul><ul><li>Sealed bid, Dutch </li></ul><ul><li>No non-repudiation? </li></ul><ul><li>Shills? </li></ul><ul><li>ebay.com trusted </li></ul>
  17. 17. auctionwatchers.com <ul><li>Meta site </li></ul><ul><li>Auction tracking of computer equipments </li></ul><ul><li>onsale.com - Open cry auctions </li></ul><ul><li>egghead.com </li></ul><ul><ul><li>Regn required credit card </li></ul></ul><ul><li>webauction.com </li></ul>

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