, Volume 48, Issue 1, pp 7–15 | Cite as

Distributed ascending proxy auction — A cryptographic approach

  • Daniel Rolli
  • Michael Conrad
  • Dirk Neumann
  • Christoph Sorge


In recent years, auctions have become a very popular price discovery mechanism in the Internet. The common auction formats are typically centralized in nature. The peer-to-peer paradigm demands gearing up auctions for decentralized infrastructures. In this context, this paper proposes a distributed mechanism for ascending second-price auctions that relies on standard cryptographic algorithms. In essence, the auction protocol has the capability of preserving the privacy of the winning bidder’s true valuation.

The auction protocol makes use of a high number of auctioneers divided into several groups. A bidder creates an encrypted chain of monotonously increasing bidding steps, where each bidding step can be decrypted by a different auctioneer group. This considerably reduces the attack and manipulation possibilities of malicious auctioneers. In addition, this secure approach does not require bidders to be online unless they are submitting their bid chain to the auctioneers.


Internet Economics Distributed Auctions Privacy Trust Security Protocols Peer-to-Peer Systems 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. [AbSu02]
    Abe, M.; Suzuki, K.: M+1-st price auction using homomorphic encryption. 5th International Conference on Public Key Cryptography, 2002.Google Scholar
  2. [BaSt01]
    Baudron, O.; Stern, J.: Non-interactive private auctions. 5th Annual Conference on Financial Cryptography, 2001.Google Scholar
  3. [Bran02]
    Brandt, F.: A verifiable, bidder-resolved auction protocol. AAMASWorkshop on Deception, Fraud and Trust in Agent Societies, 2002.Google Scholar
  4. [Bran03]
    Brandt, F.: Fully private auctions in a constant number of rounds. 7th International Conference on Financial Cryptography (FC), 2003.Google Scholar
  5. [Bran05]
    Brandt, F.: How To Obtain Full Privacy in Auctions. Preliminary Draft, February 9, 2005.Google Scholar
  6. [Cach99]
    Cachin, C.: Efficient private bidding and auctions with an oblivious third party. 6th ACM Conference on Computer and Communications Security, 1999.Google Scholar
  7. [FoIM05]
    Fontoura, M.; Ionescu, M.; Minsky, N.: Decentralized Peer-to-Peer Auctions. In: Electronic Commerce Research Journal 5 (2005) 1, S. 7–24.CrossRefGoogle Scholar
  8. [FrRe96]
    Franklin, M. K.; Reiter, M. K.: The design and implementation of a secure auction service. In: IEEE Transactions on Software Engineering 22 (1996), S. 302–312.CrossRefGoogle Scholar
  9. [HaSt05a]
    Hausheer, D.; Stiller, B.: Decentralized Auction-based Pricing with PeerMart. 9th IFIP/IEEE International Symposium on Integrated Network Management (IM 2005), Nice, France, 2005.Google Scholar
  10. [HaSt05b]
    Hausheer, D.; Stiller, B.: PeerMart: The Technology for a Distributed Auction-based Market for Peer-to-Peer Services. 40th IEEE International Conference on Communications (ICC 2005), Seoul, Korea, 2005.Google Scholar
  11. [Kiku01]
    Kikuchi, H.: (M+1)st-price auction protocol. 5th International Conference on Financial Cryptography (FC), 2001.Google Scholar
  12. [KHAN00]
    Kikuchi, H.; Hotta, S.; Abe, K.; Nakanishi, S.: Resolving winner and winning bid without revealing privacy of bids. International Workshop on Next Generation Internet, 2000.Google Scholar
  13. [LiAN02]
    Lipmaa, H.; Asokan, N.; Niemi, V.: Secure Vickrey auctions without threshold trust. 6th International Conference on Financial Cryptography (FC), 2002.Google Scholar
  14. [McAf00]
    McAfee, A.: The Napsterization of B2B. In: Harvard Business Review 78 (2000) 6, S. 18–9.Google Scholar
  15. [RFHK01]
    Ratnasamy, S.; Francis, P.; Handley, M.; Karp, R.; Shenker, S.: A Scalable Content-Addressable Network. ACM SIGCOMM, San Diego, CA, 2001.Google Scholar
  16. [Schn99]
    Schneier, B.: Attack Trees: Modeling Security Threats. In: Dr. Dobb’s Journal. December 1999.Google Scholar
  17. [SMKK01]
    Stoica, I.; Morris, R.; Karger, D.; Kaashoek, M. F.; Balakrishnan, H.: Chord: A scalable peer-to-peer lookup service for internet applications. ACM SIGCOMM, San Diego, CA, 2001.Google Scholar

Copyright information

© Vieweg Verlag/GWV Fachverlage GmbH 2006

Authors and Affiliations

  • Daniel Rolli
    • 1
  • Michael Conrad
    • 2
  • Dirk Neumann
    • 1
  • Christoph Sorge
    • 2
  1. 1.Universität Karlsruhe (TH)KarlsruheGermany
  2. 2.Institut für TelematikUniversität Karlsruhe (TH)KarlsruheGermany

Personalised recommendations