The Advantages of Designing Adaptive Business Agents Using Reputation Modeling Compared to the Approach of Recursive Modeling

Abstract

Adaptive business agents operate in electronic marketplaces, learning from past experiences to make effective decisions on behalf of their users. How best to design these agents is an open question. In this article, we present an approach for the design of adaptive business agents that uses a combination of reinforcement learning and reputation modeling. In particular, we take into account the fact that multiple selling agents may offer the same good with different qualities, and that selling agents may alter the quality of their goods. We also consider the possibility of dishonest agents in the marketplace. Our buying agents exploit the reputation of selling agents to avoid interaction with the disreputable ones, and therefore to reduce the risk of purchasing low value goods. We then experimentally compare the performance of our agents with those designed using a recursive modeling approach. We are able to show that agents designed according to our algorithms achieve better performance in terms of satisfaction and computational time and as such are well suited for the design of electronic marketplaces.