Jeffrey O. Kephart and Amy Greenwald
IBM Institute for Advanced Commerce
IBM Thomas J. Watson Research Center
P.O. Box 704, Yorktown Heights, NY 10598
Shopbots are programs that automatically search the Internet for information that pertains to the price and quality of goods or services on behalf of consumers. This paper addresses the economic implications of the widespread utilization of shopbots, as shopbots are viewed as an increasingly essential component of electronic commerce. The research described herein includes the proposal, analysis, and simulation of a simple economic model which captures some of the essence of shopbots, in an attempt to shed light on their potential impact on markets. In particular, a variety of adaptive, price-setting algorithms are considered which firms or agents might implement to maximize their profits in the face of a growing community of shopbots. Overall, this study should provide new insights on the impact of agent and information technology on the nascent information economy.