Intelligent Agents for E-Commerce: Trends and Future Impact on Business Models and Markets

Abstract

A characteristic feature of the explosive growth in electronic commerce is the rapid innovation and adoption of new technologies, which results in the creation of new business relationships between consumers, firms, and markets. One such technology that is profoundly changing the dynamics of the electronic marketplace is ‘intelligent agent’ technology. Agents have the ability to autonomously carry out various activities on behalf of their principals. At a micro-economic level, agents can help buyers and sellers achieve greater efficiencies of information exchange in the electronic business-to-consumer and business-to-business domains. Additionally, they facilitate the creation of vertically integrated portals that have a significant impact on the macroeconomic landscape. Using many real-world examples, we characterize the different roles that software agents play in the various e-commerce business models and also touch upon their impact on creation of new market structures. We address price-matching versus price-comparison agents. We highlight the various purchase decision criteria evident in various vertical markets and suggest the need for a cross-industry product (and service) attribute data representation model, based on the expanded capabilities of XML. We contrast the autonomous price comparisons enabled by agents with the expanded criteria comparisons facilitated by the e-commerce rating sites. We discuss the public policy implications of these second-generation e-commerce agents with regard to data representation standardization and consumer information privacy. We present future directions for intelligent agent functions that encompass standard representation of decision criteria such as delivery and payment options, return policies, service, quality, trust, and reputation.