Abstract:
An interactive system conducts auctions over an open communications network. Remote bidder site(s) are interconnected with remote scum site(s). Data for desired merchandise to be acquired at an auction is entered and a bidding strategy is automatically generated at a remote bidder site. The generated bidding strategy is dien implemented at a remote seller site. Auction data relating to merchandise to be auctioned is entered and a selling strategy is generated on the basis of the auction data at the seller site. Thereafter, the generated selling strategy is implemented by interaction with bidding agent(s) at the seller site. During an auction at a seller site, the bidder and seller actions are controlled and synchronized.

Description:
BACKGROUND OF THE INVENTION 
     The present invention relates to electronic commerce and in particular to an interactive computer system and method for conducting auctions over the Internet. 
     Buying and selling over the Internet is predicted to account for a significant percentage of commercial transactions for goods and services over the next decade. An important growth area in the field of electronic commerce are on-line auctions and there are currently numerous such facilities available on the Internet. Dedicated auction house Web pages advertise the merchandise to be auctioned and give details of the time period bids will be accepted and the current high bids. On accessing such a Web site, an interested party must first register at the site giving personal details such as name, address etc. and payment instructions such as credit card details for account settlement in the event of a successful bid. If the party wishes to bid for a particular merchandise lot for auction at that site, he must complete an on-line bid form which is then submitted by electronic mail to the auction house server where it is processed. The current bid price displayed on the Web page for the merchandise in question is updated in accordance with new bids received. On close of the auction, successful bidders are notified by electronic mail, payment is effected and the purchased merchandise is delivered in accordance with the payment and delivery instructions submitted on registration by the successful bidding party. 
     Although on-line auctions available over the Internet present considerable advantages over traditional auctions, in that they are accessible to a wider audience and do not necessitate physical presence at a particular location at a particular time, there are several difficulties and shortcomings associated with these facilities. Firstly, for a consumer interested in purchasing a particular item of merchandise at an auction, it is necessary to find on-line auction sites having such merchandise for auction. Since the majority of search engines currently available on the Web are general in scope, the average keyword search for “auction” and the “desired merchandise item” will produce thousands of “hits”, most of which have nothing to do with either auctions or the merchandise item in question but just happen to have those words buried somewhere in the web site text. Hence, a consumer may experience considerable difficulties in even finding a suitable on-line auction. 
     Secondly, on submitting a bid to the auction server, the bidder must regularly monitor the current high bid price on the auction house Web page in order to keep informed as to the progress of the auction. Since bids ate sometimes accepted over a time period of several hours, days or even weeks, a bidder may have to access the Web pages on several occasions in order to determine whether it is necessary to submit a higher bid. Even if an interested bidder waits until close to the deadline for accepting bids before submitting a bid higher than the current high bid price at that time, it can take considerable time for the bid to be delivered by electronic mail and there is a risk that the bid will not be processed in time or that a higher bid will be received and accepted before the deadline. Hence, unlike in a traditional auction where the physical presence of a bidder at the auction means that they can react immediately on a real-time basis, the ability of bidders to react as the auction progresses is severely restricted by network limitations. 
     For sellers too, current on-line auction facilities present considerable difficulties. Sellers must also search the Web for a suitable auction site at which to offer their merchandise for auction and again like bidders are unable to react as the auction progresses on a real-time basis. For example, if a seller decides close to the deadline for accepting bids to withdraw his merchandise from the auction or to change the minimum bid price that will be acceptable, the situation may well be out of his control in that there is no guarantee that the notice of withdrawal submitted by electronic mail will be reach the auction server and be processed in time. 
     Hence, there currently does not exist any easy method for enabling this important sector of electronic commerce to be performed by either consumers or providers. None of the facilities currently available are automated nor do they offer intelligent support to the user. Moreover, finding appropriate Internet auctions can be extremely difficult at present. 
     SUMMARY OF THE INVENTION 
     It is an object of the present invention to provide an improved system and method for conducting electronic auctions over an open communications network. 
     According to a first aspect of the present invention, there is provided an interactive computer system for conducting auctions over an open communications network comprising one or more remote bidder sites interconnected with one or more remote seller sites, characterized in that a bidder site comprises:
         data input means for entering data relating to desired merchandise to be acquired at an auction;   bidding strategy generation means for automatically generating a bidding strategy on the basis on the input data relating to the desired merchandise; and   mobile bidding agent means adapted to implement the generated bidding strategy at a remote seller site; and in that a seller site comprises:   data input means for entering data relating to merchandise to be auctioned;   selling strategy generation for generating a selling strategy on the basis on the input data relating to the merchandise to be auctioned;   selling agent means adapted to implement the generated selling strategy by interaction with one or more bidding agents at that seller site; and   auction management means for controlling and synchronizing the bidder and seller agent means during an auction at that seller site.       

     According to a second aspect of the present invention, there is provided a method for conducting an auction over an open communications means comprising a plurality of remote interconnected sites characterized by the steps of:
         creating at a remote seller site, seller agent means arranged to implement a predetermined selling strategy in relation to merchandise to be auctioned at that seller site;   creating at one or more bidder sites, bidder agent means arranged to implement a predetermined bidding strategy at a remote seller site;   transmitting the bidder agent means over the network to a remote seller site; and   conducting an auction at the remote seller site by implementing the selling strategy of the seller agent means and the bidding strategies of the one or more bidder agent means.       

     The present invention automates the auction process (i.e., bidding, buying and selling) by enabling buyers and sellers to create “agents” which act on their behalf in the Internet auction. The agents are capable of communicating with each other in order to conduct the auction process and to execute a transaction between one or more successful bidders and the seller. 
    
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS 
       Embodiments of the present invention will now be described by way of example, with reference to the accompanying drawings in which: 
         FIG. 1  is a schematic diagram representing an open communications network according to the present invention; 
         FIG. 2  is a block diagram representing the main components of a bidder site of the open communications network of  FIG. 1 ; 
         FIG. 3  is a block diagram representing the main components of a seller site of the open communications network of  FIG. 1 ; 
         FIG. 4  is a flow diagram representing the creation of a bidder site; 
         FIG. 5  is a flow diagram representing the creation of a seller site; and 
         FIGS. 6A ,  6 B and  6 C are flow diagrams representing a search by a bidder agent for a seller site and the conducting of an auction at that seller site. 
     
    
    
     DETAILED DESCRIPTION 
     For ease understanding, the four major types of auction which may be conducted with the system of the present invention will be described briefly. In a sealed bid auction, each bidder submits a bid without any knowledge of the bid price of other bidders. The merchandise is sold to the highest bidder for the highest bid price, provided that this price equals or exceeds a predetermined reserve bid price. A Vickrey auction is similar to a sealed bid auction but the merchandise is sold to the highest bidder at the second highest bid price submitted by a bidder, provided that this price equals or exceeds the predetermined reserve bid price. In an English auction, bidding is opened at a predetermined starting price and only bids higher than that price will be accepted. The merchandise is sold to the highest bidder for the highest bid price, provided that this price equals or exceeds a predetermined reserve bid price. A Dutch auction is opposite to an English auction in that bidding is opening at a high bid price and is lowered until a bidder agrees to pay the current bid price, provided that this price equals or exceeds a predetermined reserve bid price. 
     Referring to  FIG. 1 , the communications network  10  comprises a plurality of remote computer sites  12  interconnected by the Internet. The plurality of remote computer terminals  12  includes one or more of bidder sites  20  representing one or more parties who wish to participate in an auction so as to purchase particular merchandise and one or more seller sites  40  representing one or more parties offering particular merchandise for sale by auction. 
       FIG. 2  illustrates the components of a bidder site  20 . The bidder site  20  includes a computer terminal  22  connected to the Internet by means of a modem  24 . The computer terminal  22  includes a user interface means in the form of a display screen  26  and a keyboard  28  to allow a user to interact with the terminal at the bidder site  20 , a central processing unit  30  for processing data and for controlling the operation of the bidder site  20  and a memory unit  32  coupled to the central processing unit  30  for storing data. The central processing unit  30  includes a bidding strategy generator  34  for generating a specific bidding strategy for an auction on the basis of appropriate data input by a user at the bidder site  20 , a mobile bidding agent  36  for implementing the specific bidding strategy at a remote seller site  40  and a bidding agent interpreter  38  for interpreting the information contained within the bidding agent  36  and running the bidding agent  36  as an automaton. 
       FIG. 3  illustrates the components of a seller site  40 . The seller site  40  includes a computer terminal  42  connected to the Internet by means of a modem  44 . The computer terminal  42  includes a user interface means in the form of a display screen  46  and a keyboard  48  to allow a user to interact with the terminal at the seller site  40 , a central processing unit  50  for processing data and for controlling the operation of the seller site  40  and a memory unit  52  coupled to the central processing unit  50  for storing data. The central processing unit  50  includes a selling strategy generator  54  for generating a specific selling strategy for an auction on the basis of appropriate data input by a user at the seller site  40 , a selling agent  56  for implementing the specific selling strategy at that seller site  40  by interaction with one or more bidder agents  36 , a selling agent interpreter  58  for interpreting the information contained within the selling agent  56  and running the selling agent  56  as an automaton and an auction manager  60  for controlling and synchronizing bidder and seller agents  36  and  56  during an auction at that seller site  40 . 
     The bidding and selection strategy generators  34  and  54  comprise evolved bidding and selling strategies respectively which have been created on the basis of certain assumptions. In the preferred embodiment of the present invention, the evolved strategies are generated by estimating for the following parameters:
         (i) the approximate minimum value that could be expected to be received for the merchandise to be auctioned;   (ii) the approximate maximum value that could be expected to be received for the merchandise to be auctioned;   (iii) the maximum valuation range for the merchandise to be auctioned; and   (iv) the minimum valuation range for the merchandise to be auctioned.       

     These estimates are intended to cover all possible price scenarios which could be achieved for the merchandise at an auction. A series of basic bidding and selling strategies are then generated for each type of auction type (i.e. Sealed bid, Vickrey, English or Dutch) on the basis of these values and are encoded using a set of fuzzy logic rules and genetic algorithm structures. Genetic algorithms are parallel algorithms that transform populations of individual objects (genomes encoded solutions to problems) into new populations. The operations that are used to effect the transformation are analogous to those found in natural genetic operations such as sexual recombination or crossover. The individuals in the population are encoded as sequences of numbers which typically consist of a fixed or variable length binary character string. An initial population of genomes is evaluated to test for fitness with respect to a particular purpose and genetic operations on selected individuals result in the generation of a new population of individuals. 
     Hence, the series of basic generated selling and/or bidding strategies are tested in a simulated auction environment simulator and the fittest basic strategies are selected on the basis of the profit generated or loss incurred at the simulated auction. The fittest strategies are combined together to form a new population of strategies using crossover and mutation operations. This procedure is repeated for a predetermined number of strategy generations until an acceptable bidding and/or selling strategy is generated. 
     It should be understood that one or more acceptable bidding and/or selling strategies generated in this way are implemented in software and are downloaded on the processing unit of the terminals at the remote sites of the system of the present invention. These bidding and/or selling strategies will be subsequently used to generate further specific bidding and/or selling strategies based on specific data input by a bidder or seller at a remote terminal as will be described below. 
     Bidder  36  and seller  56  agents are then created to implement the specific bidding or selling strategy generated at the bidder  20  or seller  40  sites. The present invention uses intelligent agent techniques, including mobile agent techniques to automate the auction process (bidding, buying and selling) for auctions conducted over the Internet. Intelligent mobile agent techniques allow software objects (Agents) to be transmitted between different computing elements on the network, allowing new code to enter an existing element, run in order to perform some data gathering exercise and then as appropriate move on to another element. 
     The bidder  36  and seller  56  agents are intelligent agents and comprise scripts written in an SGML-based language. The scripts define all the properties that a bidder or seller may wish the agent to possess in order to act on their behalf at an auction. For example, the seller agent script may comprise information regarding the merchandise to be auctioned, the type of auction to be conducted (e.g. Sealed bid, Vickrey, English or Dutch), and the date and time that the auction is scheduled to take place. The seller agent script will also comprise the specific selling strategy generated at the seller site  40 . For obvious security reasons, the specific selling strategy will be encoded and embedded within the seller agent script. The seller agent  46  has an associated interpreter  58  which serves to interpret the information contained in the script and to run the seller agent  56  as an automaton, i.e. the agent has various states and transitions. 
     The bidder agent script may comprise information regarding the location of specific seller sites  20  or geographical network limits and/or time limitations within which to search for seller sites  20  and information regarding the desired merchandise to be purchased at the auction. The bidder agent script will also comprise the specific bidding strategy generated at the bidder site  20  which again for security reasons will be encoded and embedded within the seller agent script. The bidder agent  36  has an associated interpreter  38  which to interpret the information contained in the script and to run the bidder agent  36  as an automaton, i.e. the agent has various states and transitions. However, in contrast to the seller agent  56 , the bidder agent  36  is implemented in mobile agent technology so that the bidder agent  36  can move away from the bidder site  20  and run at remote seller sites  40 . 
     The creation of bidder and seller sites  20  and  40  and a typical on-line auction carried out in accordance with the present invention will now be described with continuing reference to  FIGS. 1  to  3  and with reference to the flow diagrams shown in  FIGS. 4  to  6 . Referring first to  FIG. 4 , a person (“bidder”) at a remote site  20  wishes to buy a particular type of car at an auction. The bidder activates the on-line auction facility on his computer terminal  22  by clicking on the appropriate icon on his screen  24  (Step  100 ). The bidder is first requested to input whether he wishes to bid or to sell and selects the bid icon displayed on the screen  24  (Step  102 ). A bid template appears on the screen  24  into which the bidder enters via the keyboard  26  criteria concerning the car he wishes to buy, such as the manufacturer, the model type, the year or years of manufacture, the maximum and minimum price that he is prepared to pay for the car and geographical area limitations for possible auctions at which he is prepared to bid (Step  104 ). It should be understood that other criteria such as the color of the car, the maximum number of owners etc., may also be stipulated by the bidder as desired. 
     It should also be appreciated that the criteria to be entered by a bidder in the bid template will vary according to the desired merchandise. For example, if the bidder wishes to purchase a holiday by auction, the criteria may include one or more destinations, the type of accommodation required, the duration of the holiday, etc. 
     The input data is transmitted to the central processing unit  30  of the terminal  22  and an optimum value for the maximum bid price is generated by the bidding strategy generator  34  (Step  106 ). The optimum maximum bid price generated is displayed on the screen  24  and the bidder is requested to confirm agreement with this value and that the specific bid strategy generated should be implemented (Step  108 A). On confirmation of agreement with the maximum bid price and to implementation of the specific bid strategy, the bidder agent  36  is generated by the central processing unit  30  of the remote bidder site  20  (Step  110 ), exits the bidder site and is transmitted over the Internet (Step  112 ). 
     If the bidder does not confirm agreement with the specific bidding strategy generated, he can choose to abandon creation of the bidder site  20  or can amend the information in the bid template (Step  108 B). If the bidder chooses to abandon creation of the bidder site, the process ends (Step  108 C) and if he chooses to amend the bid criteria, Steps  106  and  108 A are repeated, the bidding strategy generator  34  calculating a modified specific bidding strategy. 
     The creation of a seller site  40  will now be described with reference to  FIG. 5. A  person (“seller”) at a remote site  40  on the network  10  (“seller site”) wishes to sell a car by auction. The seller activates the on-line auction facility on his computer terminal  42  by clicking on the appropriate icon on his screen  44  (Step  200 ). The seller is first requested to input whether he wishes to bid or to sell and selects the sell icon displayed on the screen  44  (Sep  202 ). A sell template appears on the screen  44  into which the seller must enter information via the keyboard  46  concerning the car he wishes to sell, such as the manufacturer, the model type, the year of manufacture, the minimum price that he is prepared to accept for the car and details of when the auction is to take place (Step  204 ). It should be understood that other information concerning the car to be sold can also be input as desired and that the information entered by the seller will vary in accordance with the merchandise to be sold. 
     The input data is transmitted to the processing unit  50  of the seller site terminal  42  and the optimum type of auction for sale of such merchandise is determined (e.g. Sealed bid, Vickery, English or Dutch) by the selling strategy generator  54 , together with optimum values for the reserve bid price Rp and for the starting bid price Sp, if an English or Dutch type auction has been determined as the optimum auction type (Step  206 ). The optimum reserve Rp (and starting Sp) bid prices calculated and the auction type to be conducted are displayed on the screen  44  and the seller is requested to confirm agreement with these strategy parameters and that the specific selling strategy generated should be implemented (Step  208 A). On confirmation of agreement with the reserve (and starting) bid prices and to the implementation of the generated selling strategy, the seller agent  56  is generated by the processing unit  50  of the seller site  40  (Step  210 ). The seller agent  56  waits at the seller site  40  until the designated auction time begins (Step  212 ). If the seller does not confirm agreement with the specific selling strategy generated, he can choose to abandon creation of the seller site  40  or can amend the information in the selling template (Step  208 B). If the seller chooses to abandon creation of a seller site, the process ends (Step  208 C), and if he chooses to amend the sell criteria, Steps  206  and  208  are repeated, the selling strategy generator  54  calculating a modified specific selling strategy. 
     It should be understood that the seller may wish to designate the type of auction which he wishes to be conducted on completing the selling template on the screen  44 . In this instance, only the optimum reserve (and optimum) bid prices for such an auction type will be calculated by the selling strategy generator  54 . 
     Referring now to  FIG. 6A , the bidder agent  36  searches for seller sites  40  on the network within the geographical area limitations stipulated by the bidder (Step  300 ) and on locating a first seller site  40  (Step  300 A) enters therein ( 302 ) where it communicates with the resident seller agent  56  so as to determine details of the merchandise offered for auction at that site (Step  304 ). If the merchandise for auction does not include a car matching the criteria specified by the bidder, the bidder agent  36  leaves that seller site  40  without retrieving any further information (Step  304 A) and steps  300  to  304  are repeated. If the merchandise for auction includes a car matching the criteria specified by the bidder, the bidder agent  36  communicates with the seller agent  56  further, so as to retrieve further information relating to the auction (Step  306 ). This information includes an estimate of the approximate price that the cur is expected to sell for at the auction, the time at which the auction is to take place and the type of auction to be conducted (e.g. Sealed bid, Vickrey, English or Dutch). These details are stored in the bidder agent  36 . 
     The bidder agent  36  then exits the seller site  40  (Step  308 ) and moves on over the network  10  until a further seller site  40  is found, where Steps  302  and  304  are repeated. This process continues until all seller sites  40  within the specified geographical area limitation of the network  10  have been found. It should be understood that the bidder agent  36  could be arranged to terminate the search for seller sites  40  after a predetermined time period has lapsed or after a predetermined number of appropriate seller sites  40  have been found. If no seller sites  40  are found or no seller sites  40  offering merchandise for auction matching the criteria specified by the bidder, the bidder agent  36  returns to the bidder site  20  and informs the bidder that no seller sites have been found. 
     Referring to  FIG. 6B , on leaving the last seller site  40 , the bidder agent  36  compares the information retrieved from each seller site  40  and assigns a rating to each site on the basis of the retrieved information. (Step  400 ). These ratings represent a priority system in which the seller sites  40  will be revisited and can be calculated on the basis of the time of the auction, the seller site at which the next auction is due to commence being given the highest rating, the approximate price estimated by the bidder, the seller site or sites with an approximate price within the range specified by the bidder being assigned the highest ratings, the geographical location of the seller site, the site located closest to the bidder site being assigned the highest rating or a combination of all or any of the former three. 
     The bidder agent  36  then moves back to the seller site  40  which has been assigned the highest rating (Step  402 ) and registers therein (Step  404 ). Registration involves the communication of predetermined data to an auction manager  60  located at the seller site  40 , the data comprising bidder identification details, such as the bidders name, address, bidder site details and bidder account details such as credit card or bank account details by which payment will be effected in the event that the bidder is successful at the auction. The bidder agent  36  then waits at the seller site  40  until the auction begins (Step  406 ) or in the case of a sealed bid or Vickrey auction until such time as bids are accepted. It should be appreciated that at this time, several bidder agents  36  from a plurality of different remote bidder sites  20  may have entered the seller site  40 , have registered and be waiting for the auction to begin. These bidder agents  36  will be similar to that described above but may have different specific bidding strategies encoded and embedded therein in dependence on the data entered by their bidder and on the structure and sophistication level of the bidding strategy generator  34  at their bidder site  20 . The bidder agents  36  will have reached the seller site  40  in a similar manner as described above. 
     Referring to  FIG. 6C , the auction begins (Step  500 ). If the type of auction being conducted at the selling site is an English auction, the selling agent  56  will begin implementation of its specific selling strategy by opening bidding at the starting price Sp which has previously been generated by the seller strategy generator  54  at that site  40 . Each of the individual bidder agents  36  will then implement their own specific bidding strategy by submitting bids higher than the starting price Sp but below the maximum bid price Mp which has been generated by their bidding strategy generator  34  (Steps  502  and  504 ). The auction manager  60  monitors the auction proceedings and controls the order in which bids from the bidder agents  36  are accepted by the seller agent  56 . It should be understood that if the starting bid price Sp is higher than the maximum bid price Mp of any of the bidding agents  36  at the auction, no bids will be received and the auction will end without any sale and that some bidding agents  36  may fail to participate in the bidding because that the starting bid price Sp is higher than the maximum bid price Mp of that bidding agent  36  (Step  502 A). 
     As the bid price progressively increases (Step  506 ), some of the bidder agents  36  may cease implementation of their specific bidding strategy because the current bid price Cp exceeds the maximum bid price Mp generated for that bidding agent  36  (Step  508 ). The auction continues until no more bids are received (step  510 ) and the car is sold to the highest bidding agent provided that the highest bid price Hp equals or exceeds the reserve bid price Rp generated by the selling strategy generator  56  at that site  40  (Steps  510 A and  512 ). If no further bids are received and the highest bid price Hp is less than the reserve bid price Rp, the auction is declared closed by the auction manager  60  without any sale (Step  514 ). The auction at seller site  40  is now complete and the successful bidding agent  36  returns home to its bidder site  30  and informs the bidder of his purchase (Step  516 ). Te selling agent  36  also informs the seller of the results of the auction. It should be understood that payment will be subsequently effected by the seller agent  56  on the basis of the information given by the bidder agent  36  on registration, prior to delivery of the car to the successful bidder. 
     At the end of the auction, the unsuccessful bidding agents  36  move on to the selling site  40  which has been assigned the next highest rating (Step  518 ) and Steps  402  to  516  are repeated thereat. 
     It should be understood that the bidder agent  36  could be also arranged to travel to selling sites  40  specified by the bidder rather than seeking out selling sites itself. This situation could arise when the bidder was aware of suitable selling sites  40 , perhaps through reputation or if the bidder had participated in an auction at that selling site  40  on a previous occasion. It is likely that such selling sites  40  will be dedicated auction sites which regularly conduct auctions, such as, for example, an air travel company which auctions unsold flight tickets at the last minute. 
     The bidder agent  36  may also conduct its search by communicating with other bidder agents  36  at a seller site  40  to exchange information about seller sites  40  that have been visited. In this way, the bidder agent can “learn” of new seller sites. 
     It should be understood that a seller site may crate a plurality of seller agents at his remote seller site, each conducting an auction to sell particular merchandise. These auctions may run simultaneously. A bidder may also create a plurality of bidder agents which exit the bidder site and act on the bidders behalf at a plurality of seller sites. However, the auction manager at a seller site will not allow two bidder agents originating from the same bidder site to bid at the same auction.