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

VCG Under Sybil (False-name) Attacks -- a Bayesian Analysis

VCG is a classical combinatorial auction that maximizes social welfare. However, while the standard single-item Vickrey auction is false-name-proof, a major failure of multi-item VCG is its vulnerability to false-name attacks. This occurs already in the natural bare minimum model in which there are two identical items and bidders are single-minded. Previous solutions to this challenge focused on developing alternative mechanisms that compromise social welfare. We re-visit the VCG auction vulnerability and consider the bidder behavior in Bayesian settings. In service of that we introduce a novel notion, termed the granularity threshold, that characterizes VCG Bayesian resilience to false-name attacks as a function of the bidder type distribution. Using this notion we show a large class of cases in which VCG indeed obtains Bayesian resilience for the two-item single-minded setting.Comment: This is an extended version of an article to appear in AAAI-2020. Supporting code for generating the article's figures can be found at https://github.com/yotam-gafni/vcg_bayesian_fn

Robust Combinatorial Auction Protocol against False-name Bids

This paper presents a new combinatorial auction protocol (LDS protocol) that is robust against false-name bids. Internet auctions have become an integral part of Electronic Commerce (EC) and a promising field for applying agent and Artificial Intelligence technologies. Although the Internet provides an excellent infrastructure for combinatorial auctions, we must consider the possibility of a new type of cheating, i.e., an agent tries to profit from submitting several bids under fictitious names (false-name bids). If there exists no false-name bid, the generalized Vickrey auction (GVA) satisfies individual rationality, Pareto efficiency, and incentive compatibility. On the other hand, when false-name bids are possible, it is theoretically impossible for a combinatorial auction protocol to simultaneously satisfy these three properties. The Leveled Division Set (LDS) protocol, which is a modification of the GVA, utilizes reservation prices of auctioned goods for making decisions on whether to sell goods in a bundle or separately. The LDS protocol satisfies individual rationality and incentive compatibility, although it is not guaranteed to achieve a Pareto efficient social surplus. Simulation results show that the LDS protocol can achieve a better social surplus than that for a protocol that always sells goods in a bundle

Combinatorial auctions for electronic business

Combinatorial auctions (CAs) have recently generated significant interest as an automated mechanism for buying and selling bundles of goods. They are proving to be extremely useful in numerous e-business applications such as e-selling, e-procurement, e-logistics, and B2B exchanges. In this article, we introduce combinatorial auctions and bring out important issues in the design of combinatorial auctions. We also highlight important contributions in current research in this area. This survey emphasizes combinatorial auctions as applied to electronic business situations