Walter Thoen

Toward a Generic Model of Trust for Electronic Commerce

The authors present a generic model of trust for electronic commerce consisting of two basic components, party trust and control trust, based on the concept that trust in a transaction with another party combines trust in the other party and trust in the control mechanisms that ensure the successful performance of the transaction. This generic trust model can be used in designing trust-related value-added services in e-commerce. To illustrate its design use, two e-commerce activities that require trust are compared: electronic payment and cross-border electronic trade. The model shows that each of these activities requires a different type of trust, created by completely different services.The authors present a generic model of trust for electronic commerce consisting of two basic components, party trust and control trust, based on the concept that trust in a transaction with another party combines trust in the other party and trust in the control mechanisms that ensure the successful performance of the transaction. This generic trust model can be used in designing trust-related value-added services in e-commerce. To illustrate its design use, two e-commerce activities that require trust are compared: electronic payment and cross-border electronic trade. The model shows that each of these activities requires a different type of trust, created by completely different services.

Formal aspects of a generic model of trust for electronic commerce

In this paper, we describe how an agents trust in transactions is a combination of an agents trust in the other party and the trust in the control mechanisms for the successful performance of the transaction. This distinction is, in particular, relevant for international business-to-business electronic commerce, where trading partners often do not know each other before the trading takes place. We argue also that the agents understanding of a control mechanism is essential for the agents trust in that control mechanism. We give a formal analysis of the understanding that is required for control mechanisms to work and for determining the subjective level of trust in control mechanisms in electronic commerce.

An outline of a trust model for electronic commerce

A generic model of trust for electronic commerce is presented. The basic components of the model are party trust and control trust. It is argued that an agents trust in a transaction with another party is a combination of the trust in the other party and the trust in the control mechanisms for the successful performance of the transaction. The generic trust model can be used for the design of trust related value-added services in electronic commerce. To illustrate this design use of the model, two activities in electronic commerce are compared that require trust, namely electronic payment and cross-border electronic trade. It is shown with the model that these two activities actually require two different types of trust, and that complete different services are needed to create these different types of trust.

A logical model of directed obligations and permissions to support electronic contracting

In electronic commerce paper-based trade documents are replaced by electronic messages that can be processed automatically by computer applications. Electronic contracting and negotiating is an advanced type of automated processing of electronic messages. The actual trade contract is negotiated on-line and concluded via an electronic network. To develop support software for electronic contracting, it is essential to have an adequate model of the content of a contract. One of the requirements of such a model is that it gives an adequate analysis of the obligations and rights of the partners to a contract. Obligations and permissions in trade contracts typically are directed: they hold between two parties. An example of a directed obligation is the obligation of a buyer to pay the seller money in exchange for goods. We present a formal model of directed obligations and permissions in trade contracts. This formal model can be used for the specification of software to support electronic contracting.

Using event semantics for modeling contracts

Currently a number of these on-line support systems for electronic contracting are under development. In this paper we develop a logical formalism to represent the content of business contracts. This formalism can be used to develop applications that can automatically negotiate and process contracts, or it can be used to develop online help systems that explain to the human negotiator what for him the implications are of a certain contract that is proposed to him by the counter-party. The formalism we develop is based upon recent developments in the field of the Formal Language for Business Communication (FLBC) and event semantics. In the paper we show how many key constructs of the content of business contracts can be modeled using event semantics. We also show that the formalism can be implemented in Prolog.

INCAS: a legal expert system for contract terms in electronic commerce

Electronic commerce is doing business via electronic networks. Paper-based trade documents such as, for example, request for quotation, purchase order or invoice are replaced by electronic messages, in particular Electronic Data Interchange (EDI) messages. These electronic messages are not only transmitted much faster than paper-based documents, but they can also be processed automatically by computers. An example of this automated processing of electronic messages is electronic contracting and negotiation where the actual trade contract is on-line negotiated and concluded via an electronic network. We present the legal expert system INCAS that can provide on-line explanations about the use of Incoterms in trade contracts. Incoterms stipulate which party (buyer or seller) is responsible for arranging and paying transport of the goods, and arranging the documents necessary for this transport (e.g. export and import clearance documents, certification of origin, quality certificates etc.). INCAS is implemented in the programming language Prolog. We also explain how the defeasible reasoning capability of Prolog is essential for modelling the reasoning about the Incoterms.

Modeling directed obligations and permissions in trade contracts

We present definitions for directed obligation and permission in trade procedures and contracts. These definitions are based on deontic logic and action logic. The aim of these definitions is to give better models of directed obligation and permission that enables better modeling of procedures and contracts in (electronic) commerce. We show that these definitions can be used to give a more sophisticated formal framework for representing so called Deontic Deep Structure Models (DDSM) for business procedures. These models can be used to support the electronification of such procedures.

A Logical Model of Trust in Electronic Commerce

Most people agree that electronic commerce can only become a success if the general public trusts the virtual environment. In this paper we describe how an agents trust in transactions is a combination of an agents trust in the other party and the trust in the control mechanisms for the successful performance of the transaction. This distinction is in particular relevant for international business-to-business electronic commerce, where trading partners often do not know each other before the trading takes place. We argue also that the agents understanding of a control mechanism is essential for the agents trust in that control mechanism. We give a formal analysis of the understanding that is required for control mechanisms to work, and for determining the subjective level of trust in control mechanisms in e-commerce.

Modeling Controls for Dynamic Value Exchanges in Virtual Organizations

The e 3 -value modeling tool was developed for the design of a value proposition for virtual organizations. However, it is less suitable for designing the control structure of the virtual organization. We show how e 3 -value can be extended using legal concepts such as ownership, possession, usufruct and license. We also introduce value object transfer diagrams that show the transfers of value objects graphically and that can be used for elicitation of the required control mechanisms in order for the virtual organization to function properly and with a level of risk that is acceptable to all parties in the virtual organization.

A logical model of transfer of obligations in trade contracts

In this paper we present an outline of a formal framework for representing Deontic Deep Structure Models for business procedures and contracts. These models can be used in redesign of such procedures. In particular, to transform paper-based procedures into electronic procedures for electronic commerce. The framework is based on a combination of deontic logic and action logic. To illustrate its usefulness we illustrate how transferable obligations, i.e. obligations that can be transferred from one agent to another, can be analysed in this framework. In particular, we analyse the difference between transfer of agency and transfer of liability of an obligation.