Self-Regulation for Online Auctions: An Analysis

The most prevalent form of Internet fraud is auction fraud. As fraud affects both the profits of Internet auction houses as well as honest traders of auction goods, they have a mutual incentive to reduce fraud. However, existing research suggests that little effort has been made by the Internet auction industry to control fraud. As a result, there have been increasing calls for government intervention to regulate the Internet auction marketplace. In this study, we perform a grounded theory analysis of fraud in the Internet auction marketplace. Specifically, this research explores the institutions that experienced traders and auction houses employ to reduce the incidence of fraud. Preliminary evidence suggests that, contrary to common perception, the Internet auction industry has developed many sophisticated institutions for combating fraud. These institutions operate primarily by reducing information asymmetries that con artists exploit. However, due to the ease of entry into Internet auction markets, new entrants become easy prey for con artists

Online Auction Fraud: Are the Auction Houses Doing All They Should or Could to Stop Online Fraud?

In April 1998, the FTC released a consumer alert pertaining to the increasing problem of online auction fraud. As the number of online auction participants increased, online auction fraud was becoming more prevalent. The FTC requested comments regarding methods that would be appropriate for curbing the increase in consumer deception. Many in the online auction industry proposed voluntary self-regulation. This Note exposes the inadequacy of industry self-regulation by analogizing online auction abuse with the misuse and near downfall of the 900-number industry. This Note proposes that only a regime of strict industry guidelines that the FTC initiates will halt online industry abuse

Economic Mechanism Design for Securing Online Auctions

Enhancing e-commerce security through computing technology alone is not sufficient. E-commerce designers should apply economic mechanisms to design proper digital processes that accommodate new perspectives raised in e-commerce. For instance, traditional auction mechanisms, such as the Generalized Vickrey Auction, are vulnerable to false-name bidding, an online fraud exploiting the lack of authentication over the Internet. We develop a Sealed-bid Multi-round Auction Protocol (S-MAP), which sells multi-unit identical goods. S- MAP is not only robust against false-name bidding but also simple and efficient

Existing and Potential Remedies for Illegal Flipping in Buffalo, New York

The City of Buffalo should amend the documents used at the annual In Rem foreclosure auction to require more information from bidders and purchasers under penalty of perjury, thereby making it easier to detect, deter, and punish parties interested in purchasing properties to illegally flip them. There are already more abandoned houses in the City of Buffalo than it can even keep track of. These houses lower property values of surrounding homes in already distressed neighborhoods and in turn, lower tax revenues for the city. Abandoned houses also invite vandalism, drug users and squatters. They pose a threat in the form of potential instances of arson and cost the city millions of dollars in demolition expenses. Houses become abandoned for many reasons, but one is that they sometimes fall into the hands of illegal flippers

Wine, Fraud and Expertise

While fraud has existed in various forms throughout the history of wine, the establishment of the fine and rare wine market generated increased opportunities and incentives for producing counterfeit wine. In the contemporary fine and rare wine market, wine fraud is a serious concern. The past several decades witnessed significant events of fine wine forgery, including the infamous Jefferson bottles and the more recent large-scale counterfeit operation orchestrated by Rudy Kurniawan. These events prompted and renewed market interest in wine authentication and fraud detection. Expertise in wine is characterized by the relationship between subjective and objective judgments. The development of the wine fraud expert draws attention to the emergence of expertise as an industry response to wine fraud and the relationship between expert judgment and modern science

A Novel Method to Calculate Click Through Rate for Sponsored Search

Sponsored search adopts generalized second price (GSP) auction mechanism which works on the concept of pay per click which is most commonly used for the allocation of slots in the searched page. Two main aspects associated with GSP are the bidding amount and the click through rate (CTR). The CTR learning algorithms currently being used works on the basic principle of (#clicks_i/ #impressions_i) under a fixed window of clicks or impressions or time. CTR are prone to fraudulent clicks, resulting in sudden increase of CTR. The current algorithms are unable to find the solutions to stop this, although with the use of machine learning algorithms it can be detected that fraudulent clicks are being generated. In our paper, we have used the concept of relative ranking which works on the basic principle of (#clicks_i /#clicks_t). In this algorithm, both the numerator and the denominator are linked. As #clicks_t is higher than previous algorithms and is linked to the #clicks_i, the small change in the clicks which occurs in the normal scenario have a very small change in the result but in case of fraudulent clicks the number of clicks increases or decreases rapidly which will add up with the normal clicks to increase the denominator, thereby decreasing the CTR.Comment: 10 pages, 1 figur