Agent Technology for e-Commerce

1. Agent Technology for e-Commerce Chapter 1: Introduction Maria Fasli http://cswww.essex.ac.uk/staff/mfasli/ATe-Commerce.htm

2. In the not so distant future … On a Friday afternoon …

3. Towards a paradigm shift • Throughout the short history of computing there have been changes in how people think about and use computers • Paradigm shifts bring about changes to the status of computers within society • Two major paradigm shifts: • First phase: mainframes with one CPU which is shared; rigid command line interfaces. Computers are regarded as powerful calculation and data administration tools • Second phase: transistor size reduces, manufacturing becomes cheaper which leads to personal computers (PCs). User-centred and friendly window-based interfaces. PCs are used for word processing, computer games, image processing

4. Ubiquity • Third phase is slowly dawning upon us • The vision of ubiquitous computing: digital and other computational technologies are present in all aspects of human life • The signs are around us today • Today, users are increasingly surrounded by numerous tiny processing units in every aspect of their lives • The huge growth of the Internet has redefined the role of computers as windows to the world

5. Interaction and delegation • The users’ needs have inherently changed • They require assistance, guidance and support in the vast information space of the Internet • The standard user-computer interaction model which is based on the direct manipulation metaphor does not suffice any more • The nature of computation has changed from mere calculation to delegation and continuous interaction • New theoretical models and software engineering methodologies are required to support the design and development of systems that reflect this shift

6. The need for smart systems • Delegation of goals and continuous interaction with computer systems, assume building systems to act on one’s behalf • The increasing complexity of delegated goals requires systems that are ‘smart’: • Are autonomous • Actively seek to achieve their goals • Learn • React to changes that affect their goals • Interact with other systems

7. Agents: A first definition • Natural metaphor for such inevitably intricate and complex system: an agent which acts on behalf of the user • Computation is not simply calculation, but delegation and interaction • Such a system is not usually an isolated entity • A multi-agent system (MAS) comprises a number of agents that communicate and interact with each other to solve a complex problem or further their users’ objectives • Agents can provide the means to mask the underlying complexity of our use of computers and render IT more friendly and accessible even to novice users

8. A brief history • Roots in AI and DAI • AI’s goal is to understand intelligence and devise intelligent systems: e.g. McCarthy’s Advice Taker • Research in AI developed into separate strands that concentrated on specific aspects of intelligence such as learning, knowledge representation, planning, natural language • Symbolic approach to intelligence: • Intelligence is the product of manipulating symbolic representations of the world. • Deliberative or cognitive systems • But these are heavy and cumbersome with limited interaction

9. Some researchers started rejecting the symbolic AI approach • Brook’s behavioural thesis in the 1980s: intelligence can emerge from the interaction with one’s environment through simple behaviours • The antithesis of these approaches has led to a rift in AI • Widely accepted that both reactive and deliberative components are required to achieve flexible and intelligent behaviour in complex and dynamic environments

10. The Actor model of Hewitt (1970s) • Blackboard systems (1970s): first prototypical MASs • The ContractNet protocol was developed by Smith to deal with complex problem solving • Work in DAI began to flourish in the 1980s with a number of projects, dedicated events and the publication of seminal works • In the 1990s the field went from strength to strength • Nowadays a well-established area on its own • The Semantic Web initiative and the emergence of Web Services further enforce the relevance and strength of the agent paradigm

11. Computer Science Biology Sociology Psychology Agents and Multi-agent Systems Linguistics Ethology Law Mathematics Economics Philosophy Interdisciplinary nature The discipline of agents and multi-agent systems is very much interdisciplinary

12. The novelty in agents • What makes agents different, over and beyond other software? Agents simply need to be told the goal and then being ‘smart’ they will actively seek ways to satisfy this with the minimum intervention from the user • So what do agents have to offer? • They can solve problems that are beyond the scope of other methodologies or programming paradigms • They can help us solve problems that can already be solved with other methodologies, but in a significantly better, faster, cheaper and more natural way

13. Agent applications • Process control systems • Operations management • Information management • Entertainment • Education

14. Electronic commerce • Networking via value-added networks (VANs), since the 1970s. These are static, costly and inflexible • The immense growth of the Internet has changed the scene • The relative low cost of the IT infrastructure required has enabled smaller companies to take advantage of this new medium • A new phenomenon: e-commerce

15. E-commerce and E-business • E-commerce involves the conduct of economic-related activities that take place between at least two parties who interact electronically. Such activities cross organizational boundaries • E-business: includes an organization’s internal operations as well as operations related to third parties. • E-commerce is always e-business, but not the other way round

16. E-commerce and organizations • Basic e-commerce-enabling technology: Web browsers • An option available to organizations irrespective of size E-commerce has had a significant impact on organizations • New markets, new opportunities for those willing to embrace it • Organizations can expand their target markets and reach new customers, distributors, partners • They can streamline their operations with their business partners • Agility and innovation: dynamic creation of virtual organizations and virtual enterprises in order to exploit niches in the market

17. Internet-based companies without a physical presence • New types of services, e-services • More efficient economies as the transaction costs are reduced • Vendors can now know who visits their online shops: personalized services but also price discrimination schemes • Vendors can check their competitors’ prices and adjust theirs accordingly: competition increases, though implicit price collusion can happen • Changes in the market structures • New business models, e.g. consumer-to-consumer (C2C)

18. But e-commerce has also had negative consequences: • New competition: the same technology that allows one to exploit new markets and opportunities also allows one’s competitors, but now on a global scale • Building, using and maintaining an e-commerce system has a cost • Organizations need to be able to differentiate themselves from their competitors

19. E-commerce and the individual • Shift in the individual consumer’s attitudes towards purchasing goods and services • For the individual, e-commerce offers: • Flexibility and great convenience • Greater economic efficiency • Empowerment: information asymmetry has been alleviated • Increased choice, not bound by geographical and other barriers • Time and money savings • New opportunities and markets, e.g. C2C

20. But e-commerce has also had negative consequences: • Can only benefit those with access to computers – digital divide: the largest part of the population looses out • Fraud, both old and new types of fraud • Invasion of one’s privacy: user profiling building unbeknown to the user; price discrimination schemes • Information overload: on the one hand increased choice, on the other too many choices to handle

21. Agents and e-commerce Potential uses of agent technology in e-commerce: • Find, recommend and compare products, vendors, services • Participate in electronic markets and negotiate the terms/price of transactions or contracts with other participants • Perform transactions on behalf of users • Track the users’ interests and offer personalized services • Monitor conditions and provide notifications • Retrieve, filter and mine information and knowledge • Produce and deliver e-services, such as information gathering, processing and management

22. Automating e-commerce through agents will bring about significant advantages: • Organizations can truly do business 24/7 and take advantage of opportunities as they arise • Agents can undertake the time-consuming task of negotiating terms/prices of contracts and transactions • They can make good decisions improving overall economic efficiency • They can offer personalized services to users • Facilitate the creation and operation of virtual organizations

23. The vision • Agents can enable the move from tradition brick and mortar companies to intelligent and ubiquitous digital business • From simple facilitators to complex and autonomous decision makers: handling incomplete, inconsistent information in real time and making complex, but also good decisions • We need: • Knowledge-based agents that can reason under uncertainty and with incomplete information • Goal-driven agents that can plan • Agents that can learn and adapt to their environment