Auction-based pricing model for web service providers

Applying auctions to Web services selection and invocation calls for examination due to the unique features of Web services, such as interoperable machine-to-machine interactions andre-enterable bargaining services. In this paper, we propose a formal model for Web services-based auctions. Examining a one-sided sealed auction type, we prove mathematically that service requestors' risk preferences could lead to different pricing strategies for service providers towards higher profit. We argue that Service Level Agreement (SLA) documents can be used to analyze service requestors 'preferences. On top of WS-Agreement, we propose a basic service requestor risk preference elicitation algorithm, as well as a historical data-based service requestor risk preference prediction model. Guidelines are provided to iteratively approach the learning rate of the proposed risk preference prediction model. The methods and techniques presented in this paper can be reused to investigate and examine more facades of services-oriented auctions towards establishing a new research realm on comprehensive services-oriented auctions. Copyright © 2006, Idea Group Inc.