Agent Mediated Electronic Commerce

1. Dr. Chris Preist HP Labs Agent Mediated Electronic Commerce filename\location

2. The Three Phases of Electronic Commerce • Electronic Data Interchange • Electronic Marketplaces • Agent-Mediated Electronic Commerce filename\location

3. 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. Purchase order Purchaser Supplier Invoice Payment filename\location

4. 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. Seller Buyer E-Market Buyer Seller Buyer Seller filename\location

5. Agent-Mediated Electronic Commerce Agents represent buyers and sellers, and can participate in many Electronic markets. Agent E-Market Buyer Auction Agent Seller Advantages: Best of both worlds – Flexible but automated. Disadvantages: Technology not yet widely accepted. filename\location

6. The Stages of E-Commerce • Matchmaking • Negotiation • Contract Fulfilment filename\location

7. Matchmaking Directory Service List of contacts Request Buyer Agent Purchase goal Buyer filename\location

8. Negotiation Seller Agent Buyer Agent Seller Buyer A Auction A A E-Market A A A filename\location

9. Negotiation Contract Buyer Agent Seller Agent Seller Buyer filename\location

10. Contract Fulfilment Payment Buyer Agent Seller Agent Seller Buyer Service delivery filename\location

11. Key Technologies for AMEC • Interoperability Standards • Intelligent Algorithms filename\location

12. 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) filename\location

13. 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. filename\location

14. 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? filename\location

15. 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. filename\location

16. 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. filename\location

17. 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. filename\location

18. 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. filename\location

19. Formation Formation Normative Core Normative Core Fulfilment Fulfilment Execution Framework Execution Framework contract formation Contract Buyer Seller filename\location

20. Formation Formation Normative Core Normative Core Fulfilment Fulfilment Execution Framework Execution Framework scheduling of enactment Add contract and scheduleexecution Buyer Seller filename\location

21. Formation Formation Normative Core Normative Core Fulfilment Fulfilment Execution Framework Execution Framework An obligation is pending An obligation is pending. Its fulfilment is triggered. Buyer Seller filename\location

22. Formation Formation Normative Core Normative Core Fulfilment Fulfilment Execution Framework Execution Framework The processes are invoked 4. The processes to fulfil the obligation are retrieved, and invoked on theexecution framework Buyer Seller filename\location

23. Formation Formation Normative Core Normative Core Fulfilment Fulfilment Execution Framework Execution Framework The processes are executed 5. The processes are executed Buyer Seller filename\location

24. Formation Formation Normative Core Normative Core Fulfilment Fulfilment Execution Framework Execution Framework The obligation is fulfilled The obligation is fulfilled Buyer Seller filename\location

25. Formation Formation Normative Core Normative Core Fulfilment Fulfilment Execution Framework Execution Framework Signals fulfilment Signals the fulfilment of the obligation (CFP) Buyer Seller filename\location

26. Formation Formation Normative Core Normative Core Fulfilment Fulfilment Execution Framework Execution Framework Acknowledge fulfilment Acknowledge the fulfilment Buyer Seller filename\location

27. 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. filename\location