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. © 2013 Springer-Verlag.