Advertisement

Shopbots and Pricebots

  • Amy R. Greenwald
  • Jeffrey O. Kephart
Conference paper
Part of the Lecture Notes in Computer Science book series (LNCS, volume 1788)

Abstract

Shopbots are software agents that automatically gather and collate information from multiple on-line vendors about the price and quality of consumer goods and services. Rapidly increasing in number and sophistication, shopbots are helping more and more buyers minimize expenditure and maximize satisfaction. In response to this trend, it is anticipated that sellers will come to rely on pricebots, automated agents that employ price-setting algorithms in an attempt to maximize profits. In this paper, a simple economic model is proposed and analyzed, which is intended to characterize some of the likely impacts of a proliferation of shopbots and pricebots.

In addition to describing theoretical investigations, this paper also aims toward a practical understanding of the tradeoffs between profitability and computational and informational complexity of pricebot algorithms. A comparative study of a series of price-setting strategies is presented, including: game-theoretic (GT), myoptimal (MY), derivative following (DF), and no regret learning (NR). The dynamic behavior that arises among collections of pricebots and shopbot-assisted buyers is simulated, and it is found that game-theoretic equilibria can dynamically arise in our model of shopbots and pricebots.

Keywords

Nash Equilibrium Equilibrium Price Price Strategy Repeated Game Strategy Nash Equilibrium 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. 1.
    Auer, P., Cesa-Bianchi, N., Freund, Y., Schapire, R.: Gambling in a rigged casino: The adversarial multi-armed bandit problem. In: Proceedings of the 36th Annual Symposium on Foundations of Computer Science, pp. 322–331. ACM Press, New York (1995)Google Scholar
  2. 2.
    Aumann, R.: Subjectivity and correlation in randomized strategies. Journal of Mathematical Economics 1, 67–96 (1974)zbMATHCrossRefMathSciNetGoogle Scholar
  3. 3.
    Banos, A.: On pseudo games. The Annals of Mathematical Statistics 39, 1932–1945 (1968)zbMATHCrossRefMathSciNetGoogle Scholar
  4. 4.
    Blackwell, D.: An analog of the minimax theorem for vector payoffs. Pacific Journal of Mathematics 6, 1–8 (1956)zbMATHMathSciNetGoogle Scholar
  5. 5.
    Burdett, K., Judd, K.L.: Equilibrium price dispersion. Econometrica 51(4), 955–969 (1983)zbMATHCrossRefGoogle Scholar
  6. 6.
    Chavez, A., Maes, P.: Kasbah: an agent marketplace for buying and selling goods. In: Proceedings ofthe First International Conference on the Practical Application of Intelligent Agents and Multi-Agent Technology, London, U.K. (April 1996)Google Scholar
  7. 7.
    Cournot, A.: Recherches sur les Principes Mathematics de la Theorie de la Richesse. Hachette (1838)Google Scholar
  8. 8.
    Bradford DeLong, J., Michael Froomkin, A.: The next economy? In: Hurley, D., Kahin, B., Varian, H. (eds.) Internet Publishing and Beyond: The Economics of Digital Information and Intellecutal Property. MIT Press, Cambridge (1998)Google Scholar
  9. 9.
    Eichmann, D.: Ethical web agents. In: Proceedings of the Second World Wide Web Conference 1994: Mosaic and the Web (1994)Google Scholar
  10. 10.
    Eriksson, J., Finne, N., Janson, S.: Information and interaction in MarketSpace — towards an open agent-based market infrastructure. In: Proceedings of the Second USENIX Workshop on Electronic Commerce (November 1996)Google Scholar
  11. 11.
    Foster, D., Vohra, R.: A randomization rule for selecting forecasts. Operations Research 41(4), 704–709 (1993)zbMATHCrossRefGoogle Scholar
  12. 12.
    Foster, D., Vohra, R.: Regret in the on-line decision problem. Games and Economic Behavior 21, 40–55 (1997)zbMATHCrossRefMathSciNetGoogle Scholar
  13. 13.
    Foster, D., Young, P.: When rational learning fails. Mimeo (1998)Google Scholar
  14. 14.
    Freund, Y., Schapire, R.: Game theory, on-line prediction, and boosting. In: Proceedings of the 9th Annual Conference on Computational Learning Theory, pp. 325–332. ACM Press, New York (1996)CrossRefGoogle Scholar
  15. 15.
    Fudenberg, D., Tirole, J.: Game Theory. MIT Press, Cambridge (1991)Google Scholar
  16. 16.
    Greenwald, A.: Learning to Play Network Games. PhD thesis, Courant Institute of Mathematical Sciences, New York University, New York (May 1999)Google Scholar
  17. 17.
    Greenwald, A., Friedman, E., Shenker, S.: Learning in network contexts: Results from experimental simulations. Games and Economic Behavior: Special Issue on Economics and Artificial Intelligence (1999) (forthcoming)Google Scholar
  18. 18.
    Greenwald, A., Mishra, B., Parikh, R.: The Santa Fe bar problem revisited: Theoretical and practical implications. Presented at Stonybrook Festival on Game Theory: Interactive Dynamics and Learning (July 1998)Google Scholar
  19. 19.
    Greenwald, A.R., Kephart, J.O.: Shopbots and pricebots. In: Proceedings of Sixteenth International Joint Conference on Artificial Intelligence, vol. 1, pp. 506–511 (August 1999)Google Scholar
  20. 20.
    Greenwald, A.R., Kephart, J.O., Tesauro, G.J.: Strategic pricebot dynamics. In: Proceedings of First ACM Conference on Electronic Commerce (November 1999) (to Appear)Google Scholar
  21. 21.
    Hannan, J.: Approximation to Bayes risk in repeated plays. In: Dresher, M., Tucker, A.W., Wolfe, P. (eds.) Contributions to the Theory of Games, vol. 3, pp. 97–139. Princeton University Press, Princeton (1957)Google Scholar
  22. 22.
    Hart, S., Mas Colell, A.: A simple adaptive procedure leading to correlated equilibrium. Technical report, Center for Rationality and Interactive Decision Theory (1997)Google Scholar
  23. 23.
    Huck, S., Normann, H.-T., Oechssler, J.: Learning in a cournot duopoly - an experiment (July 1997) (unpublished Manuscript)Google Scholar
  24. 24.
    Kephart, J.O., Hanson, J.E., Levine, D.W., Grosof, B.N., Sairamesh, J., Segal, R.B., White, S.R.: Dynamics of an information filtering economy. In: Proceedings of the Second International Workshop on Cooperative Information Agents (1998)Google Scholar
  25. 25.
    Kephart, J.O., Greenwald, A.R.: Shopbot economics. In: Proceedings of Fifth European Conference on Symbolic and Quantitative Approaches to Reasoning with Uncertainty, pp. 208–220 (July 1999)Google Scholar
  26. 26.
    Krulwich, B.: The BargainFinder agent: Comparison price shopping on the Internet. In: Williams, J. (ed.) ICCBR 1995, pp. 257–263. SAMS.NET publishing (MacMillan), USA (1996), http://bf.cstar.ac.com/bf, http://www.geocities.com/ResearchTriangle/9430
  27. 27.
    Nachbar, J.: Prediction, optimization, and learning in repeated games. Econometrica 65, 275–309 (1997)zbMATHCrossRefMathSciNetGoogle Scholar
  28. 28.
    Nash, J.: Non-cooperative games. Annals of Mathematics 54, 286-295 (1951)Google Scholar
  29. 29.
    Tesauro, G.J., Kephart, J.O.: Pricing in agent economies using multi-agent q-learning. In: Proceedings of Fifth European Conference on Symbolic and Quantitative Approaches to Reasoning with Uncertainty, pp. 71–86 (July 1999)Google Scholar
  30. 30.
    Tirole, J.: The Theory of Industrial Organization. The MIT Press, Cambridge (1988)Google Scholar
  31. 31.
    Tsvetovatyy, M., Gini, M., Mobasher, B., Wieckowski, Z.: MAGMA: an agent-based virtual market for electronic commerce. Applied Artificial Intelligence (1997)Google Scholar
  32. 32.
    Varian, H.: A model of sales. In: American Economic Review, Papers and Proceedings, vol. 70(4), pp. 651–659 (September 1980)Google Scholar
  33. 33.
    Wilde, L.L., Schwartz, A.: Comparison shopping as a simultaneous move game. Economic Journal 102, 562–569 (1992)CrossRefGoogle Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2000

Authors and Affiliations

  • Amy R. Greenwald
    • 1
  • Jeffrey O. Kephart
    • 1
  1. 1.IBM Institute for Advanced CommerceIBM Thomas J. Watson Research CenterYorktown HeightsUSA

Personalised recommendations