CS 486 Software Agents and Electronic Commerce Chris Brooks

What is Electronic Commerce? It’s not: –A class on how to get rich quick. –A class on how to start a business. –A survey of current technology. It is: –An examination of the computational problems involved in conducting commerce on the Internet. Many of these problems are instances of more general CS problems. –E-commerce is a relevant and useful domain.

Class Structure Small class: lots of opportunity for discussion, tailoring of topics to suit people’s interests. Class discussion: focused on principles, techniques, ideas. Assignments: A chance to explore a particular piece of technology in more depth.

Class Structure Readings will be assigned from the text, or from papers provided online. Tests: –Midterm –Final –Occasional quizzes based on readings Projects –3 not-too-big projects in which you’ll work with a particular piece of e-commerce technology.

Brick and Mortar to Digital How do we implement the phenomena of real-world exchanges in a digital environment? –Identity –Atomicity/nonrepudiation –Discovery –Negotiation –Exchange

Software Agents A unique feature of electronic commerce is that some of the participants are computational agents. –These are software programs acting on behalf of a user. –Given some autonomy and decision-making power. –May interact with human participants.

Information Goods Another unique aspect of e-commerce is the exchange of information goods. –MP3s, stock quotes, television shows, articles, weather reports, etc. Content-based Can be replicated for free –Economies of scale, file-sharing networks, fair use Can be delivered on-demand

Overview Discovery NegotiationExchange Security and Encryption Network and Web Protocols

Electronic commerce happens within a network –Often, but not always, the Internet. –Some knowledge of protocols, from UDP/TCP to Web Services, is essential. –We won’t focus too much on lower-level protocols, but assignments will deal with Web Services and SOAP.

Encryption and Security Encryption and Security are essential components of all facets of e-commerce. Encryption: encoding a message so that it cannot be easily read. –RSA, PGP, DES Security: Much more general. Focuses on the robustness of a system against tampering –Public Key Infrastructure, Trust Relationships, Certificate Authorities, privacy

Discovery Discovery emcompasses the problem of finding buyers, sellers or goods. –Matchmaking –Data Mining –Recommender Systems –XML and description languages –Shopbots, price comparison agents –Search Engines and coverage of the Web

Negotiation Negotiation involves determining the parameters of a deal. –Learning Prices –Game Theory –Auctions –Automated Contracting

Exchange Exchange covers the problem of swapping goods for payment –Escrow services –Credit and Debit Cards –Micropayments and Digital Cash –Smart Cards –Desirable properties: anonymity, liquidity, nonrepudiation, no double-charging or spending, fast, portable, scalable

Some Examples: Amazon eBay Pets.com MP3.com Travelocity Priceline Monster.com All of these business have different degrees of electronic and traditional business models.

Some Recurring Issues: How can we automatically sort/describe/manage a huge, complex information space? How can we engineer the sorts of solutions that have evolved in the physical economy? (Do we want to?) What problems play to the strengths of the Web?

More Recurring Issues Copyright, intellectual property and fair use –What sorts of revenue-generating models make sense in a digital economy? Positive vs. normative analyses –How things work vs. how things should be. Designing robust, adaptive systems –Agent-based systems respond at different rates from human systems –Behavior may be less predictable –Focus on mechanisms that ensure particular behaviors.

No Silver Bullet In 1997, e-commerce was the “hot thing” –Tremendous growth and competition –Exploration was ahead of understanding Now, things have sobered. –It’s not enough to have a flashy Web site. –Businesses must have a clear idea of how to be profitable. –Big firms are taking control of the market. The fundamental question: what aspects of business can be done better on the Web than in a brick-and-mortar world?