. Shopbots are agents that search the Internet for information pertaining to the price and quality of goods or services. With the advent of shopbots, a dramatic reduction in search costs is imminent, which promises (or threatens) to radically alter market behavior. This research includes the proposal and theoretical analysis of a simple economic model which is intended to capture some of the essence of shopbots, and attempts to shed light on their potential impact on markets. Moreover, experimental simulations of an economy of software agents are described, which are designed to model the dynamic interaction of electronic buyers, sellers, and shopbots. This study forms part of a larger research program that aims to provide new insights on the impact of agent and information technology on the nascent information economy. 1 Introduction Shopbots, agents that automatically search the Internet for goods and services on behalf of consumers, herald a future in which autonomous agents become...

We have recently seen a tremendous number of auctions conducted over the Internet. This form of electronic commerce is rapidly growing, and it is projected to account for 30 % of all E-Commerce by 2002. Using actual bidding transaction data from 324 business-toconsumer online auctions, we analyze the bidders ' arrival process during each auction. We find that most bidders like to sign on early in the auction; typically, 70 % of the bidders sign on during the first half. Our statistical analysis reveals that the minimum initial bid is negatively correlated with the number of bidders per auction, while the number of units offered and the length of the auction are positively correlated with the number of bidders. We also present a model for estimating the expected price as a function of the number of bidders, the mean and variance of the private valuation distribution, and the number of units to be sold in the auction. Our analysis shows that increased dispersion in the bidders ' values may either increase or decrease the auction price, depending on the bidders ' overall arrival process, the length of the auction, and the number of units. We calculate the optimal auction length and show that an auction's profit is a unimodal function of its duration and the number of units. The paper also addresses several other economic tradeoffs that are relevant for the optimal design of Internet auctions.