Sealed-Bid Auction Protocols

Abstract

In the Internet era electronic commerce is an important and popular industry. Electronic auctions provide a key function in e-commerce, enabling effective and fair distribution of electronic as well as non-electronic goods. Like other fields of e-commerce, e-auctions face serious security threats. Fraud can be committed by bidders or auctioneers. Most popular Internet auctions sites use an open-cry bidding process. This can add excitement to an auction in progress and possibly encourage new bidders to join an auction. However, there are serious difficulties in maintaining the security requirements often required in commercial auctions, particularly in terms of protecting bid confidentiality and bidder privacy. Additionally, some of the current auction techniques are interactive and require many rounds of communication before completion so that more time is required to determine the final winning price. Intensive communication over the insecure Internet is also a problem from the perspective of availability of service and network security. For these reasons most recent research in this area has concentrated on sealed-bid auctions. Sealed-bid auctions are the focus of this chapter. In this chapter, security requirements in e-auction including correctness, fairness, non-repudiation, robustness, public verifiability, bid privacy, and other desired properties like price flexibility and rule flexibility are introduced. The existing approaches to realize them are investigated. The authors show that the key requirement is bid privacy and the main challenge to the design of an e-auction is how to protect bid privacy without compromising other requirements and properties. Techniques to achieve bid privacy are presented in this chapter according to different application environments.