A Bidder Strategy System for Online Auctions Trust Measurement

A Bidder Strategy System for Online Auctions Trust Measurement

El-Sayed M. Towfek El-Kenawy (Mansoura University, Mansoura, Egypt), Ali Ibraheem El-Desoky (Mansoura University, Mansoura, Egypt) and Amany M. Sarhan (Mansoura University, Mansoura, Egypt)
DOI: 10.4018/ijsita.2014070103

Abstract

In this paper, the authors investigate trust of the online auctions one of most e-commerce fields used today, with online auctions; users could buy/sell items all over the world. Compared to traditional auctions, online auctions bring greater convenience while dramatically decreasing the transaction cost., Participants' trust more important one, this paper propose new algorithm that depends on bidder Strategy System(BSS).
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1. Introduction

An e-auction is an indirect sale transaction type of e-commerce. An e-auction increases competition among vendors in addition to broaden the set of potential consumer. And the Internet in particular, has fueled the widespread adoption of auctions in business-to-consumer (B2C), consumer to- consumer (C2C), and business-to-business (B2B) environments. (The Ministry of Finance, 2009). In an auction (electronic or not), buyers compete to get the right to buy the product. A seller wants to sell an item at the highest possible price and the buyers wish to obtain the item at the lowest possible price. An auction helps the seller to identify the buyer who is willing to pay the highest price. There are many types of auctions such as an English, The most general auction method, “first-price open price auction”, Dutch auction in which the bidding process start with a top price decreasing until an auction participant accepts the price stated, American Auction or Closed Bid Auction in which the highest bid wins, when the bid envelopes are opened and Vickrey Auction or Uniform Second Price in which the winner pays the second highest price and not his own offer (Aleem & Antwi-Boasiako, 2011).

1.1. Auction Types

There are many type of auction, as shown in Figure 1.

Figure 1.

Tree graph of auction type

1.2. The Main Stages of an e-Auction Market Transaction

  • Identification

  • Product Brokering

  • Merchant Brokering

  • Negotiation

  • Final Sale

  • Evaluation

1.3. Benefits of Online Auction

The online auction has many benefits as the Ministry of Finance Government of the Republic of Trinidad and Tobago declared as follow:

  • Save time;

  • Reduce the number of suppliers used;

  • Standardize the sourcing process;

  • Help organizations standardize contract terms and conditions;

  • Buyers can be assured the obtained price is competitive.

For these benefits, the most famous international companies use the online auction in their deals such as British Airways, FedEx, Exxon Mobil, Nestle; Shell, etc. (Bădic, Giurca, & Wagner, 2008).

Although the spread of e-auctions all over the world it has several limitations:

  • Possibility of fraud;

  • Limited participation;

  • Security;

  • Long cycle time;

  • Monitoring time.

In the online auctions the participants are anonymous for each other; that is the basic reason for fraud which occur because there is no mutual trust among the participants. Fraud is common problem as internet crimes; it was cleared in IC3 fraud report of 2010 internet crimes as shown in Figure 2.

Figure 2.

IC3 chart for internet crimes (Aleem & Antwi-Boasiako, 2011)

The National White Collar Crime Center (Xu, Shatz, & Bates, 2008) declared that the exploration of the eBay auction system is also significant for the experiment carried out since eBay fraud accounts for more than half of online auction fraud. The pervious static show fraud in cyber-crime, Internet users' complaint and how it causes a great loss for all participants' .The fraud can occur through negotiation stage where, Negotiation is a Process by which group of software agents communicate with each other to reach a mutually acceptable agreement on any matter (Skogsrud, Benatallah, & Casati, 2003). To limit the problem of fraud, we can predict the user behavior trusted or not presenting a new model can predict the participant' behavior trusted or not depending on his bidding increment price. Using the intelligent agent technology.

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