Auctions with Untrustworthy Bidders

The paper analyzes auctions which are not completely enforceable. In such auctions, economic agents may fail to carry out their obligations, and parties involved cannot rely on external enforcement or control mechanisms for backing up a transaction. We propose two mechanisms that make bidders directly or indirectly reveal their trustworthiness. The first mechanism is based on discriminating bidding schedules that separate trustworthy from untrustworthy bidders. The second mechanism is a generalization of the Vickrey auction to the case of untrustworthy bidders. We prove that, if the winner is considered to have the trustworthiness of the second-highest bidder, truthfully declaring one's trustworthiness becomes a dominant strategy. We expect the proposed mechanisms to reduce the cost of trust management and to help agent designers avoid many market failures caused by lack of trust

Effects of Public Emergency on Citizens\u27 Usage Intention Toward E-Government: A Study in the Context of War in Iraq

The study examines the effects of a public emergency on citizens’ intention to use e-government services. Since the national disaster on September 11, 2001, the United States government has invested considerable efforts to increase homeland security and public safety. However, virtually no academic research has focused on the impact of public emergencies on e-government services. The study examines relationships between citizens’ intentions to use e-government services and factors that can influence those intentions in the context of a public emergency. The first survey was conducted in April 2003, when the second Iraq war was ongoing and the Homeland Security Advisory System’s terrorist treat level was high. The analysis of the survey results and implications of the study are presented

Bringing E-Government into the Classroom: A Case of E-Commerce Education

The paper discusses a novel educational initiative in e-commerce pedagogy where students work on an e-government project. The paper describes a two-semester joint e-government project conducted by the town of Amherst, NY, and the State University of New York at Buffalo. During the first semester, students in a graduate e-commerce course in the School of Management were instructed to identify and analyze management issues valuable for small or middle size local government. In the second semester graduate students from the Department of Computer Science and Engineering designed and implemented prototypes of three e-government portals: an on-line action site for governmental procurement (E-Procurement), a portal for reservation of community recreation facilities (E-Recreation), and a portal for online dog registration (E-DogRegistration) combining a central registry of dog owners with distributed veterinarian databases. The objective of this initiative is twofold. First, it saves the local government resources by eliminating duplication of services and by using students as developers. Second, it provides students with real life hands-on experience. The paper discusses both the technical issues involved in the implementation of the project, and the management issues that need to be taken into account to enhance the e-commerce experience for the ordinary citizen and local governments

Contracting with Uncertain Level of Trust

The paper investigates the impact of trust on market efficiency and bilateral contracts. We prove that a market in which agents are trusted to the degree they deserve to be trusted is as efficient as a market with complete trustworthiness. In other words, complete trustworthiness is not a necessary condition for market efficiency. We prove that distrust could significantly reduce market efficiency, and we show how to solve the problem by using appropriately designed multiagent contracts. The problem of trust is studied in the context of a bilateral negotiation game between a buyer and a seller. It is shown that if the seller’s trust equals the buyer’s trustworthiness, then the social welfare, the amount of trade, and the agents ’ utility functions are maximized. The paper also studies the efficiency of advance payment contracts as a tool for improving trustworthiness. It is proved that advance payment contracts maximize the social welfare and the amount of trade. Finally, the paper studies the problem of how to make agents truthfully reveal their level of trustworthiness. An incentive-compatible contract is defined, in which agents do not benefit from lying about their trustworthiness. The analysis and the solutions proposed in this paper could help agent designers avoid many market failures and produce efficient interaction mechanisms

Trust revelation in multiagent interaction

We analyze untrustworthy interactions, that is, interactions in which a party may fail to carry out its obligations. Such interactions pose agents with the problem of how to estimate the trustworthiness of the other party. The efficiency of untrustworthy interactions critically depends on the amount and the nature of information about untrustworthy agents. We propose a solution to the problem of learning and estimating trustworthiness. Instead of relying on a third party for providing information or for backing up multiagent interaction, we propose an incentivecompatible interaction mechanism in which agents truthfully reveal their trustworthiness at the beginning of every interaction. In such a mechanism agents always report their true level of trustworthiness, even if they are untrustworthy