The Role of Middle-Agents in Electronic Commerce

  • Authors:
  • Itai Yarom;Jeffrey S. Rosenschein;Claudia V. Goldman

  • Affiliations:
  • Hebrew University;Hebrew University;University of Massachusetts

  • Venue:
  • IEEE Intelligent Systems
  • Year:
  • 2003

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Abstract

The authors explore questions related to the presence of middlemen in electronic markets. Howdoes the existence of intermediaries affect the efficiency of electronic markets? What is the roleplayed by various strategies that these intermediaries might adopt? What if they can pursue moresophisticated pricing strategies? The authors developed a simulation of an electronic marketplace,specifically a marketplace of information. All roles in these simulations were played by automatedagents, which were designed to act as information producers, information suppliers, or information"middlemen" (called InfoCenters). Simulations were then run to test how these InfoCenter intermediariesaffected the market's efficiency and price behavior. The authors looked at several different strategiesfor these middle-agents, comparing how they-and the market-did in each case. It turned out thatInfoCenters could significantly enhance the efficiency of information marketplaces, and sophisticated InfoCenters did the best of all.