Agent Technology for E-Commerce

Maria Fasli has taught a course on Agent Technology in E-commerce since 2000 as part of the MSc. in E-commerce Technology degree offered at the Department of Computer Science of the University of Essex. At the time of curriculum design, this was the first such specialized course designed in the UK. This course is now being offered as an option to other degree schemes in the Computer Science Department including the Doctoral program of the Centre of Computational Finance and Economic Agents (CCFEA).

• List of Figures xvList of Tables xviiPreface xixCHAPTER 1 – Introduction 11.1 A paradigm shift 31.1.1 A brief history 51.1.2 The novelty in agents 81.1.3 Agent applications 91.2 Electronic commerce 101.2.1 E-commerce and organizations 121.2.2 E-commerce and the individual 141.3 Agents and e-commerce 161.4 Further reading 181.5 Exercises and topics for discussion 19CHAPTER 2 – Software Agents 212.1 Characteristics of agents 222.2 Agents as intentional systems 252.3 Making decisions 262.3.1 Environments 262.3.2 Performance measure and rationality 302.3.3 Rational decision-making and optimal policies 322.3.4 Optimal policies in MDPs 342.4 Planning 372.5 Learning 382.6 Agent architectures 412.6.1 Logic-based architecture 412.6.2 Reactive architecture 452.6.3 Belief-Desire-Intention architecture 492.6.4 Hybrid architecture 542.7 Agents in perspective 572.7.1 Agents and objects 582.7.2 Agents and expert systems 592.7.3 Agents, Web Services and the Semantic Web 602.8 Methodologies and languages 622.8.1 Methodologies 622.8.2 Agent-oriented methodologies 622.8.3 Object-oriented based methodologies 662.8.4 Knowledge-engineering based and other methodologies 672.8.5 Programming languages and environments 672.8.6 From legacy systems to agents 692.9 Further reading 712.10 Exercises and topics for discussion 72CHAPTER 3 – Multi-agent Systems 753.1 Characteristics of multi-agent systems 763.1.1 Potential and challenges 773.1.2 Closed multi-agent systems 793.1.3 Open multi-agent systems 793.2 Interaction 803.2.1 Elements of interactions 803.2.2 Modes of interaction 813.2.3 Interaction protocols 833.3 Agent communication 843.3.1 Speech Act theory 853.3.2 Agent communication languages 853.3.3 Knowledge and Query Manipulation Language (KQML) 863.3.4 FIPA ACL 903.3.5 Comparing KQML and FIPA ACL 933.3.6 Knowledge Interchange Format Language (KIF) 933.3.7 Dialogues 943.3.8 A layered model of communication 953.4 Ontologies 973.4.1 Explicit ontologies 983.4.2 Developing ontologies 993.4.3 OWL 1003.5 Cooperative problem-solving 1033.5.1 Task decomposition and distribution 1043.5.2 The ContractNet Protocol 1043.6 Virtual organizations as multi-agent systems 1073.7 Infrastructure requirements for open multi-agent systems 1083.8 Further reading 1113.9 Exercises and topics for discussion 111CHAPTER 4 – Shopping Agents 1154.1 Consumer buying behaviour model 1164.2 Comparison shopping 1174.3 Working for the user 1194.4 How shopping agents work 1204.5 Limitations and issues 1224.6 Further reading 1254.7 Exercises and topics for discussion 125CHAPTER 5 – Middle Agents 1275.1 Matching 1285.1.1 Middle agent architecture 1295.1.2 Interacting through a middle agent 1305.2 Classification of middle agents 1315.2.1 Matchmaker 1325.2.2 Broker 1345.2.3 Broadcaster 1355.2.4 FIPA Directory Facilitator 1365.3 Describing capabilities 1365.4 LARKS 1375.4.1 Matching in LARKS 1395.4.2 Matching methods 1405.5 OWL-S 1445.6 Further reading 1475.7 Exercises and topics for discussion 147CHAPTER 6 – Recommender Systems 1496.1 Information needed 1516.2 Providing recommendations 1526.3 Recommendation technologies 1536.4 Content-based filtering 1536.5 Collaborative filtering 1556.5.1 How collaborative filtering systems work 1556.5.2 Neighbourhood-based algorithms 1566.5.3 Problems in collaborative filtering 1586.5.4 Collaborative filtering systems 1596.6 Combining content and collaborative filtering 1616.7 Recommender systems in e-commerce 1626.8 A note on personalization 1636.9 Further reading 1656.10 Exercises and topics for discussion 165CHAPTER 7 – Elements of Strategic Interaction 1677.1 Elements of Economics 1687.1.1 A simple market economy 1687.1.2 Consumption bundles and preferences 1737.1.3 Utilities 1777.1.4 Equilibrium 1787.2 Elements of Game Theory 1807.2.1 Strategic games 1817.2.2 Extensive form representation 1837.2.3 Information 1847.2.4 Categories of games 1857.2.5 Solution concepts 1857.2.6 Mixed strategies 1887.2.7 The prisoner’s dilemma 1917.2.8 Repeated games 1937.2.9 Dynamic games 1947.2.10 Bayesian Nash games 1967.2.11 Beliefs and sequential rationality 2007.3 Further reading 2037.4 Exercises and topics for discussion 204CHAPTER 8 – Negotiation I 2098.1 Negotiation protocols 2118.2 Desired properties of negotiation protocols 2128.3 Abstract architecture for negotiating agents 2138.4 Auctions 2158.5 Classification of auctions 2178.6 Basic auction formats 2208.6.1 English auction 2208.6.2 Dutch auction 2218.6.3 First-price sealed-bid auction 2228.6.4 Vickrey auction 2228.6.5 Allocation and revenue comparisons 2238.6.6 Disadvantages of auctions 2258.7 Double auctions 2288.7.1 Mth and (M+ 1)st price rules 2298.7.2 Implementation of the Mth and (M+ 1)st price rules 2318.8 Multi-attribute auctions 2348.9 Combinatorial auctions 2368.10 Auction platforms 2398.10.1 AuctionBot 2398.10.2 e-Game 2408.10.3 Trading agent competition 2428.10.4 Online auctions 2438.11 Issues in practical auction design 2448.12 Further reading 2478.13 Exercises and topics for discussion 248CHAPTER 9 – Negotiation II 2519.1 Bargaining 2529.1.1 Bargaining power 2539.1.2 Axiomatic bargaining 2559.1.3 Strategic bargaining 2569.1.4 The Strategic Negotiation Protocol 2589.2 Negotiation in different domains 2609.2.1 Task-oriented domains 2609.2.2 Worth-oriented domains 2669.3 Coalitions 2679.3.1 Coalition formation 2679.3.2 Coalition structure generation 2689.3.3 Division of payoffs 2719.4 Applications of coalition formation 2729.4.1 Customer coalitions 2739.4.2 Coalition Protocols 2759.4.3 Post-negotiation protocol 2779.4.4 Pre-negotiation protocol 2789.4.5 Distribution of costs and utility 2799.4.6 Other applications 2809.5 Social choice problems 2809.5.1 Making a social choice 2819.5.2 Voting protocols 2829.5.3 Maximizing social welfare 2869.6 Argumentation 2879.6.1 Generating arguments 2899.6.2 The PERSUADER system 2919.6.3 Logic-based argumentation 2939.6.4 Negotiation as dialogue games 2959.7 Further reading 2999.8 Exercises and topics for discussion 300CHAPTER 10 – Mechanism Design 30510.1 The mechanism design problem 30610.2 Dominant strategy implementation 30810.3 The Gibbard–Satterthwaite Impossibility Theorem 31110.4 The Groves–Clarke mechanisms 31210.4.1 Quasilinear environments 31210.4.2 The Groves mechanism 31310.4.3 The Clarke mechanism 31410.4.4 The Generalized Vickrey Auction 31510.4.5 Inducing truth-telling in voting mechanisms 31810.5 Mechanism design and computational issues 31910.6 Further reading 32210.7 Exercises and topics for discussion 322CHAPTER 11 – Mobile Agents 32511.1 Introducing mobility 32611.2 Facilitating mobility 32811.2.1 Migration 32911.2.2 Modes of migration 33011.3 Mobile agent systems 33111.3.1 Non-Java mobile agent systems 33211.3.2 Java-based mobile agent systems 33311.4 Aglets 33511.4.1 Programming model 33611.4.2 Communication 33711.4.3 Security 33811.5 Mobile agent security 33911.5.1 Threats 34011.5.2 Security services 34311.5.3 Protecting the host 34411.5.4 Protecting the mobile agent 34511.5.5 Dealing with the perpetrators 34711.6 Issues on mobile agents 34811.7 Further reading 35011.8 Exercises and topics for discussion 350CHAPTER 12 – Trust, Security and Legal Issues 35112.1 Perceived risks 35312.2 Trust 35512.3 Trust in e-commerce 35612.3.1 Trust in agent technology 35712.3.2 Trust in the marketplace 35912.4 Electronic institutions 36012.4.1 Norms, institutions and organizations 36112.4.2 From norms to institutions 36212.4.3 Formalizing norms 36412.4.4 Agents in electronic institutions 36512.5 Reputation systems 36612.5.1 Reputation systems in practice 36712.5.2 Issues and problems 36912.6 Security 37012.7 Cryptography 37312.7.1 Symmetric cryptosystems 37412.7.2 Asymmetric cryptosystems 37512.7.3 Applications of public key cryptography 37612.7.4 Digital signatures 37812.7.5 Digital certificates 38012.8 Privacy, anonymity and agents 38112.8.1 Agents and privacy 38112.8.2 Anonymity 38312.8.3 Protecting privacy 38412.9 Agents and the law 38612.10 Agents as legal persons 38912.11 Closing remarks 39112.12 Further reading 39212.13 Exercises and topics for discussion 394APPENDIX A – Introduction to Decision Theory 395A.1 Probability theory 396A.1.1 Prior probability 397A.1.2 Conditional probability 397A.1.3 Independence 398A.1.4 Bayes’ rule 398A.2 Making decisions 399A.2.1 Non-probabilistic decision-making under uncertainty 401A.2.2 Probabilistic decision-making under uncertainty 403A.3 Utilities 403A.3.1 Preferences 404A.3.2 Utility functions 405A.3.3 Utility and money 407A.3.4 Multi-attribute utility functions 411A.4 Further reading 411Bibliography 413Index 445