New research project to design the future of e-commerce

New research project to design the future of e-commerce

Economists and computer scientists will in the next six years collaborate to develop new, sophisticated e-commerce solutions. The Project "Foundations of Electronic Markets", FEM, is supported by 26.5 million. kr from the Strategic Research Council.

Professor Peter Bogetoft heads the economic team

The project is headed by Professor Peter Bogetof, Department of Economics, CBS and Professor Ivan Damgaard, Department of Computer Science, Aarhus Univeristet. Associate Professor Steffen Andersen from the Department of Economics, CBS, also participates in the project.

Information is key

In the FEM project, economists and computer scientists must work closely together. Peter Bogetoft explains why:

- The focus of economic theory in the last 10-20 years has been on information. We have learned that a market or a negotiation depends intimately on who knows what when. This also implies that encrypted calculations (secure multi-party computing, SMC) have such great potentials in economic systems. With SMC, we can accurately and reliably manage information. It provides opportunities for simple and secure implementation of many of the theoretical mechanisms that economists have developed over the years.

Complicated algorithms

- Economists also need computer science to solve many applied problems. Many real trading situations are extremely complex because they involve many firms and many types of objects simultaneously. This means that the theoretical solutions from a computational perspective can be extremely complicated and require efficient algorithms to work in practice.

- A co-operation with leading operation researchers and computer scientists are therefore absolutely necessary. An example is combinatorial auctions, where it is important for buyers which combinations of assets they end up with, and where it is therefore not optimal just to hold a series of independent auctions.