Anonymity and security in continuous double auctions for Internet retails market

Abstract

Electronic auctions have become an integral part of electronic commerce nowadays. Besides the popular single-sided auction protocols, i.e. English auction, Vickrey auction etc., continuous double auction (CDA) is an important auction protocol that permits multiple buyers and sellers to trade goods. Internet CDAs have been widely used in financial and commodities markets. Although Internet provides an excellent infrastructure for CDAs, anonymity and security are important issues in the electronic CDA marketplaces. While most studies have been focusing on the strategies in agent-oriented CDAs (Friedman and Rust, 1992; He and Leung, 2001; Cliff and Bruten, 1998; and Preist and van Tol, 1998), relatively little research has been done on the privacy and security issues. In this paper, we first discuss the privacy and security issues in electronic CDAs, and propose that the security requirements in electronic CDAs include anonymity, traceability, impossibility of impersonation, unforgeablility, and verifiability. We then describe an anonymous and secure CDA protocol for electronic marketplaces. In the new protocol, both the anonymity of traders and the traceability of false offers are achieved. The identities of normal traders and their bidding behaviors are protected, while the identities of malicious traders can be revealed. With a simple analysis, we show that our CDA scheme satisfies all the required security.