Page last updated at 10:07 GMT, Thursday, 6 August 2009 11:07 UK

Computer 'agents' take to the web

By Zoe Kleinman
Technology reporter, BBC News

pay per click (mouse and coins)
The software agents use simple rules to negotiate for a buyer

Artificial intelligence technology could soon make the internet an even bigger haven for bargain-hunters.

Software "agents" that automatically negotiate on behalf of shoppers and sellers are about to be set free on the web for the first time.

The "Negotiation Ninjas", as they are known, will be trialled on a shopping website called Aroxo in the autumn.

The intelligent traders are the culmination of 20 years' work by scientists at Southampton University.

"Computer agents don't get bored, they have a lot of time, and they don't get embarrassed," Professor Nick Jennings, one of the researchers behind the work, told BBC News.

"I have always thought that in an internet environment, negotiation is the way to go."

Price fixing

The agents use a series of simple rules - known as heuristics - to find the optimal price for both buyer and seller based on information provided by both parties.

Heuristics are commonly used in computer science to find an optimal solution to a problem when there is not a single "right answer".

They are often used in anti-virus software to trawl for new threats.

"If you can't analyse mathematically exactly what you should do, which you can't in general for these sorts of systems, then you end up with heuristics," explained Professor Jennings.

"We use heuristics to determine what price we should offer during the negotiation - and also how we might deal with multiple negotiations at the same time.

"We have to factor in some degrees of uncertainty as well - the chances are that sellers will enter into more negotiations than they have stock."

Fixed pricing is a relatively recent phenomenon
Nick Jennings

To use one of the intelligent agents, sellers must answer a series of questions about how much of a discount they are prepared to offer and whether they are prepared to go lower after a certain number of sales, or at a certain time of day.

They are also asked how eager they are to make a sale.

At the other end, the buyer types in the item they wish to purchase and the price they are willing to pay for it.

The agents then act as an intermediary, scouring the lists of sellers who are programmed to accept a price in the region of the one offered.

If they find a match, the seller is prompted to automatically reply with a personalised offer.

The buyer then has a choice to accept, reject or negotiate. If they choose to negotiate, the agent analyses the seller's criteria to see if they can make a better offer.

The process continues until either there is a sale or one of the parties pulls out.

Aroxo will be trialling the Negotiation Ninjas from the autumn, and plans to have the system fully operational in time for Christmas shopping this year.

The site currently offers mainly electrical goods.

While the sellers will not have to pay to use the Ninjas, they pay to contact a buyer. The charge from Aroxo is 0.3% of the buyer's original asking price.

For Professor Jennings, this application of his research marks a return to a more traditional retail model.

"Fixed pricing is a relatively recent phenomenon," he said. "Throughout history most transactions have been negotiated. Only in the last 100 years have we gone for fixed pricing."

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