Abstract
Applying auctions to Web services selection and invocation calls for examination due to the unique features of Web services, such as interoperable machine-to machine interactions and re-enterable bargaining services. In this paper, we propose a formal model for Web services-based auctions. Examining a one sided sealed auction type, we prove mathematically that service requestors’ risk preferences could lead to different pricing strategies for service providers towards higher profit. We argue that Service Level Agreement (SLA) documents can be used to analyze service requestors’ preferences. On top of WS Agreement, we propose a basic service requestor risk preference elicitation algorithm, as well as a historical data-based service requestor risk preference prediction model. Guidelines are provided to iteratively approach the learning rate of the proposed risk preference prediction model. The methods and techniques presented in this paper can be reused to investigate and examine more facades of services-oriented auctions towards establishing a new research realm on comprehensive services-oriented auctions.
Highlights
The paradigm of Web services has opened a new era for business service providers
Conducting auctions in the context of Web services introduces unprecedented requirements into the traditional auction model, such as interoperable machine-to-machine interactions, re-enterable bargaining, independent bidding, etc. This deeply explored field needs re-examination; and new auction models tailored in the field of Web services is on demand
In this paper we proposed a formal model of Web services-based auctions
Summary
The paradigm of Web services has opened a new era for business service providers. This new model allows easier management and maintenance for provider-hosting services, and creates a lot more potential business opportunities for service providers. According to the game theory, auction sellers, or, auctioneers, need to understand and examine bidder behaviors based upon bidder types, goals, and preferences Applying this theory, we introduce the following formal definition of service provider preferences: Definition 4. Consider that in a Web service auction, a service provider/requestor, or called, an agent chooses a strategy x It bears a vNM utility function U over x as U (x) and a mathematical mean function E over x as E[x]. We have proved that a service provider should adopt different auction strategies to obtain high profit if she knows corresponding service requestors’ risk preferences. Bidders’ risk preferences are typically predicted based upon bidders’ background information such as personal taste and household wealth, as well as bidding object’s perspectives, such as its price range, durability, functions, and personality (McAfee and McMillan 1987). Our approach is to utilize service requestors’ Service Level Agreement (SLA) documents in addition to the service provider’s SLA document
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