Auctions with Rational Adversary

Abstract

Security of various types of online auctions has received a considerable attention from researchers. However, very few works have analyzed the problem of security in online sealed-bid auctions from the point of view of rational participants. The paper deals with an online auction scenario where two types of participants co-exist: 1 a party corrupted by a rational adversary that have positive utilities from information gained and that has no valuation for the items on auction enabling them to bid arbitrarily and 2 rational parties that are privacy conscious, positively value information gain and have a valuation for items on auction. The secure auction protocol proposed here addresses 1 privacy concerns of the rational players from themselves as well as the rational adversary; 2 prevention of 'throwing away' of contracts by rational adversaries and 3 prevention of sellers from obtaining their copy of the contract while winners do not receive theirs.