Toward a fair indictment for sealed-bid auction with self-enforcing privacy

Abstract

In a sealed-bid auction, bidders simultaneously submit their sealed bids to the auctioneer without knowledge of the others' bids. The auctioneer will then declare the bidder with the highest price (or second-highest price) as the winner during the opening stage. Although existing bidding solutions focus on ensuring certain characteristics of the auction, including correctness, fairness, privacy protection, and confidentiality, it is difficult for losing bidders to verify whether the winner is a genuine bidder or just a fake bidder that is manipulated by a malicious party (e.g., a malicious auctioneer). In this paper, we introduce a fair indictment mechanism for an online sealed-bid auction that includes self-enforcing privacy. Our solution allows for an honest bidder to detect malicious activity and provides the bidder with verifiable evidence to indict a dishonest party. A successful indictment will give an incentive to the honest bidder and will result in a withdrawal of the result of the auction, whereas a failed indictment will require the involved complainer to pay a penalty. We achieve this goal using a scheme designed with an oblivious polynomial evaluation and homomorphic cryptosystem. We also involve a semi-honest verification agent in the indictment process to help the honest party verify the winning bid. This prevents the auctioneer from controlling the entire auction process. We also provide an analysis of the indictment, requirements, security and efficiency of the proposed mechanism and demonstrate the use of our solution in a multiple-item sealed-bid auction (i.e., combinatorial auction)