Market-based Recommendation: Agents that Compete for Consumer Attention

The amount of attention space available for recommending suppliers to consumers on e-commerce sites is typically limited. We present a competitive distributed recommendation mechanism based on adaptive software agents for efficiently allocating the 'consumer attention space', or banners. In the example of an electronic shopping mall, the task is delegated to the individual shops, each of which evaluates the information that is available about the consumer and his or her interests (e.g. keywords, product queries, and available parts of a profile). Shops make a monetary bid in an auction where a limited amount of 'consumer attention space' for the arriving consumer is sold. Each shop is represented by a software agent that bids for each consumer. This allows shops to rapidly adapt their bidding strategy to focus on consumers interested in their offerings. For various basic and simple models for on-line consumers, shops, and profiles, we demonstrate the feasibility of our system by evolutionary simulations as in the field of agent-based computational economics (ACE). We also develop adaptive software agents that learn bidding strategies, based on neural networks and strategy exploration heuristics. Furthermore, we address the commercial and technological advantages of this distributed market-based approach. The mechanism we describe is not limited to the example of the electronic shopping mall, but can easily be extended to other domains

Market-Based Task Allocation Mechanisms for Limited Capacity Suppliers

This paper reports on the design and comparison of two economically-inspired mechanisms for task allocation in environments where sellers have finite production capacities and a cost structure composed of a fixed overhead cost and a constant marginal cost. Such mechanisms are required when a system consists of multiple self-interested stakeholders that each possess private information that is relevant to solving a system-wide problem. Against this background, we first develop a computationally tractable centralised mechanism that finds the set of producers that have the lowest total cost in providing a certain demand (i.e. it is efficient). We achieve this by extending the standard Vickrey-Clarke-Groves mechanism to allow for multi-attribute bids and by introducing a novel penalty scheme such that producers are incentivised to truthfully report their capacities and their costs. Furthermore our extended mechanism is able to handle sellers' uncertainty about their production capacity and ensures that individual agents find it profitable to participate in the mechanism. However, since this first mechanism is centralised, we also develop a complementary decentralised mechanism based around the continuous double auction. Again because of the characteristics of our domain, we need to extend the standard form of this protocol by introducing a novel clearing rule based around an order book. With this modified protocol, we empirically demonstrate (with simple trading strategies) that the mechanism achieves high efficiency. In particular, despite this simplicity, the traders can still derive a profit from the market which makes our mechanism attractive since these results are a likely lower bound on their expected returns

Evolution of a supply chain management game for the trading agent competition

TAC SCM is a supply chain management game for the Trading Agent Competition (TAC). The purpose of TAC is to spur high quality research into realistic trading agent problems. We discuss TAC and TAC SCM: game and competition design, scientific impact, and lessons learnt

Pandoras Box: Does Electronic Commerce Increase the Optimal Amount of Fraud?

Close business relationships are important in the food industry. However, the introduction of electronic commerce has emerged as a fundamental challenge to these relationships. In particular, retailers who start procuring private label food products in electronic auctions risk the termination of the relationships with their suppliers thus losing the value derived from these relationships. Instead, they move their focal interest towards single, unrelated transactions. The authors argue that this development increases the optimal amount of fraud in electronic commerce. In this context, they analyze the occurrence of opportunism.Relationships, information asymmetry, auctions, opportunism, economics of information, Marketing,

The Impact of Downstream Network Subgroups on Collaboration and Performance: A Survey of Buyer-Supplier Relationships in the Dutch Flower Sector

In this paper, we aim to identify those network subgroups that enhance the collaborative governance in a focal buyer-supplier relationship. We argue, that partners in a focal buyer-supplier relationship can be seen as embedded in a broader network of business relationships with network subgroups, (e.g. other buyers, buyers customers), which provide information that can support the collaborative governance, assessed by flexibility, joint planning and joint problem solving, by lowering the level of information asymmetry between the partners. Empirical evidence was gathered through a mailed questionnaire returned by 175 Dutch suppliers of potted plants and flowers. Our results show the importance of the information provided by the network subgroups to manage the focal buyer-supplier relationships and ultimately the impact on performance. Interestingly, although five network subgroups were mentioned in the questionnaire, suppliers only obtained reliable information for their focal relationship from the downstream subgroups of other buyers (i.e. merchant-distributors) and buyer's customers (i.e. supermarkets and flower shops). In order to avoid redundancy, managers in seeking information in their business network should not consider the network as a whole, but rather the downstream subgroups.Industrial Organization,

A Multi-Agent based Configuration Process for Mass Customization

Large product variety in mass customization involves a high internal complexity level inside a companyís operations, as well as a high external complexity level from a customerís perspective. In order to reach a competitive advantage through mass customization, it is necessary to cope with both problems. This is done within the scope of variety formation and variety steering tasks: Variety formation supports customers during the configuration task according to their preferences and knowledge, variety steering tasks internally deal with finding the customizerís optimal offer. Driven by this economic background, we present a comprehensive multi-agent based design for a configuration process in this paper. It is identified as a suitable solution approach integrating both perspectives. The mass customized products are assumed to be based on a modular architecture and each module variant is associated with an autonomous rational agent. Agents must compete with each other in order to join product variants which suit real customersí requirements. The negotiation process is based on a market mechanism supported by the target costing concept and a Dutch auction.Multi-agent systems; Configuration process; Market mechanism; Mass Customization

A Configurable Matchmaking Framework for Electronic Marketplaces

E-marketplaces constitute a major enabler of B2B and B2C e-commerce activities. This paper proposes a framework for one of the central activities of e-marketplaces: matchmaking of trading intentions lodged by market participants. The framework identifies a core set of concepts and functions that are common to all types of marketplaces and can serve as the basis for describing the distinct styles of matchmaking employed within various market mechanisms. A prototype implementation of the framework based on Web services technology is presented, illustrating its ability to be dynamically configured to meet specific market needs and its potential to serve as a foundation for more fully fledged e-marketplace frameworks