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A Novel Auction Blockchain System with Price Recommendation and Trusted Execution Environment

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  • Dong-Her Shih

    (Department of Information Management, National Yunlin University of Science and Technology, Douliu 64002, Taiwan)

  • Ting-Wei Wu

    (Department of Information Management, National Yunlin University of Science and Technology, Douliu 64002, Taiwan)

  • Ming-Hung Shih

    (Department of Electrical and Computer Engineering, Iowa State University, 2520 Osborn Drive, Ames, IA 50011, USA)

  • Wei-Cheng Tsai

    (Department of Information Management, National Yunlin University of Science and Technology, Douliu 64002, Taiwan)

  • David C. Yen

    (Jesse H. Jones School of Business, Texas Southern University, 3100 Cleburne Street, Houston, TX 77004, USA)

Abstract

Online auctions are now widely used, with all the convenience and efficiency brought by internet technology. Despite the advantages over traditional auction methods, some challenges still remain in online auctions. According to the World Business Environment Survey (WBES) conducted by the World Bank, about 60% of companies have admitted to bribery and manipulation of the auction results. In addition, buyers are prone to the winner’s curse in an online auction environment. Since the increase in information availability can reduce uncertainty, easy access to relevant auction information is essential for buyers to avoid the winner’s curse. In this study, we propose an Online Auction Price Suggestion System (OAPSS) to protect the data from being interfered with by third-party programs based on Intel’s Software Guard Extensions (SGX) technology and the characteristics of the blockchain. Our proposed system provides a smart contract by using α-Sutte indicator in the final transaction price prediction as a bidding price recommendation, which helps buyers to reduce the information uncertainty on the value of the product. The amount spent on the smart contract in this study, excluding deployed contracts, plus the rest of the fees is less than US$1. Experimental results of the simulation show that there is a significant difference ( p < 0.05) between the recommended price group and the actual price group in the highest bid. Therefore, we may conclude that our proposed bidder’s price recommendation function in the smart contract may mitigate the loss of buyers caused by the winner’s curse.

Suggested Citation

  • Dong-Her Shih & Ting-Wei Wu & Ming-Hung Shih & Wei-Cheng Tsai & David C. Yen, 2021. "A Novel Auction Blockchain System with Price Recommendation and Trusted Execution Environment," Mathematics, MDPI, vol. 9(24), pages 1-19, December.
    • Handle: RePEc:gam:jmathe:v:9:y:2021:i:24:p:3214-:d:700982
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    References listed on IDEAS

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    2. Foti, Magda & Vavalis, Manolis, 2019. "Blockchain based uniform price double auctions for energy markets," Applied Energy, Elsevier, vol. 254(C).
    3. Goeree, Jacob K. & Offerman, Theo, 2003. "Winner's curse without overbidding," European Economic Review, Elsevier, vol. 47(4), pages 625-644, August.
    4. Milgrom, Paul R & Weber, Robert J, 1982. "A Theory of Auctions and Competitive Bidding," Econometrica, Econometric Society, vol. 50(5), pages 1089-1122, September.
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