Strategic Design of Mobile Agents

Much of the economic value of electronic commerce comes from the automation of interactions between businesses and individuals. Game theory is a useful set of tools that can be used by designers of electronic-commerce applications in analyzing and engineering of automated agents and communication protocols. The central theoretical concept used in game theory is the Nash equilibrium. In this article, I show how the outcomes supported by a Nash equilibrium can positively be enlarged using automated negotiations. In addition, despite the sharp falls in the share prices of many "dotcoms" since early 2000, electronic commerce is still likely to have a major and lasting effect on most forms of economic activities.