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Agent Mediated Electronic Commerce

Dr. Chris Preist

HP Labs

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The Three Phases of Electronic Commerce

•Electronic Data Interchange

•Electronic Marketplaces

•Agent-Mediated Electronic Commerce

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Electronic Data Interchange (EDI)

Business Partners electronically exchange trading documents in a pre-arranged format.

Advantages:

Reduced paperwork, faster transactions, easy to automate.

Disadvantages:

Lock-in to small number of business partners.

Purchaser Supplier

Purchase order

Payment

Invoice

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Electronic Markets

Many potential trading partners meet and negotiate at an internet site.

Advantages:

Very flexible. More competition, leading to better deals.

Disadvantages:

Not automated, so slower and more labour-intensive than EDI.

E-Market

Buyer

Buyer

Buyer

Seller

Seller

Seller

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Agent-Mediated Electronic CommerceAgents represent buyers and sellers, and can participate in manyElectronic markets.

Advantages: Best of both worlds – Flexible but automated.

Disadvantages: Technology not yet widely accepted.

Agent

Agent

Auction

E-Market

Buyer

Seller

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The Stages of E-Commerce

•Matchmaking

•Negotiation

•Contract Fulfilment

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Li st

of c o nt a ct s

Matchmaking

BuyerBuyerAgent

DirectoryService

Purchase goalRequest

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Negotiation

Seller

Buyer

BuyerAgent

SellerAgent

Auction

E-Market

A

A

A

A

A

A

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Negotiation

Seller

Buyer

BuyerAgent

SellerAgent

ContractContract

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Contract Fulfilment

SellerBuyer

BuyerAgent

SellerAgent

Payment

Service delivery

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Key Technologies for AMEC

•Interoperability Standards

•Intelligent Algorithms

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Interoperability Standards

•Service Description Language: An agreed way of describing goods being traded, and the resulting contracts. (e.g. DAML-S)

•Communication Language: A set of messages with agreed meaning. (e.g. FIPA ACL)

•Communication Protocol: An agreed set of rules stating who can send what kind of messages, when. (e.g. English Auction)

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Intelligent Algorithms

•How to negotiate with many other agents simultaneously, to reach a good deal (specified in an agreed contract).

•How to manage the interactions with other parties, according to the various contracts you have entered into.

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NEGOTIA – The Problem Tackled

•Corporate Procurement spends most of its time and effort managing relatively low cost/value purchases.

•To be competitive, these purchases potentially require simultaneous negotiations with many sellers.

•Can we automate these effectively, leaving the human experts to focus on the important deals?

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The NEGOTIA System

•Negotia manages all of the simultaneous negotiations necessary to fulfil a purchase.

•Negotia can participate in multiple 1:1 negotiations and/or multiple auctions. It deploys individual agents in each.

•Negotia computes the best spread of goods across different sellers.

•To do this, it considers different possible future scenarios.

•Negotiation terminates when Negotia has either completed the overall purchase goal or there are no further options to pursue.

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How NEGOTIA works

•Historical data are used to build a belief model of the market keyed on specific goods and suppliers.

•The belief model is a probabilistic estimate of the outcome of each negotiation and/or auction.

•Negotia computes the best spread based on the belief model and current state of negotiations.

•Best spread is updated as negotiations proceed e.g. auctions close or 1:1 negotiations complete.

•Negotia coordinates the behaviour of a set of agents: one for each negotiation or auction.

•The agent uses its beliefs together with the spread information to determine its bidding tactics.

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Contract Manager – Problem Tackled

•A business can enter into many contracts with other parties.

•These contracts place the business under certain obligations and give it certain rights.

•If a business fails to meet obligations, it may be liable to sanctions.

•Contractual agreements are often divorced from day-to-day operational decisions.

•By providing automated decision support to contract management we can prioritise our obligations quickly and effectively.

•By linking to business automation software (e.g. Workflow) we can improve the quality of operational decisions.

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The CONTRACT MANAGER system

•The system sits on top of an existing B2B execution framework, such as a Workflow system.

•Contracts are defined (through negotiation) in a structured language of permissions, obligations and sanctions. E.g. “When the seller receives £100 from the buyer, they are obliged to ship the goods within 3 days.”

•System contains a normative core able to reason about obligations. This decides which are currently active and which have the highest priority.

•System has a fulfilment module, which maps abstract obligations to (one or more) execution processes which are expected to fulfil the obligations.

•Different agents using the system communicate via the Contract Fulfilment Protocol to ensure that each agrees that obligations have been successfully met.

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contract formation

Execution Framework

Normative Core

Formation

Fulfilment

Execution Framework

Normative Core

Formation

Fulfilment

Buyer Seller

ContractContract

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scheduling of enactment

Execution Framework

Normative Core

Formation

Fulfilment

Execution Framework

Normative Core

Formation

Fulfilment

Add contract and scheduleexecution

Buyer Seller

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An obligation is pending

Execution Framework

Normative Core

Formation

Fulfilment

Execution Framework

Normative Core

Formation

Fulfilment

An obligation is pending.Its fulfilment is triggered.

Buyer Seller

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The processes are invoked

Execution Framework

Normative Core

Formation

Fulfilment

Execution Framework

Normative Core

Formation

Fulfilment

4. The processes to fulfil the obligationare retrieved, and invoked on theexecution frameworkBuyer Seller

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The processes are executed

Execution Framework

Normative Core

Formation

Fulfilment

Execution Framework

Normative Core

Formation

Fulfilment

5. The processes are executed

Buyer Seller

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The obligation is fulfilled

Execution Framework

Normative Core

Formation

Fulfilment

Execution Framework

Normative Core

Formation

Fulfilment The obligation is fulfilled

Buyer Seller

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Signals fulfilment

Execution Framework

Normative Core

Formation

Fulfilment

Execution Framework

Normative Core

Formation

Fulfilment

Signals the fulfilment of the obligation (CFP)

Buyer Seller

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Acknowledge fulfilment

Execution Framework

Normative Core

Formation

Fulfilment

Execution Framework

Normative Core

Formation

Fulfilment

Acknowledge the fulfilment

Buyer Seller

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Final Comments

•Agent Mediated Electronic Commerce aims to create a highly flexible, dynamic and automated business environment on the web.

•This vision may not be fully realisable – either for technical or business reasons.

•Nonetheless, the technology currently being developed will increase automation, and reduce lock-in.