Computer Security Essay Example | Topics and Well Written Essays - 750 words - 2

Computer Security - Essay Example In this element bidders can use the early stages to their advantage, since the prices then are low, to decide amongst themselves who should win which objects and then agree to stop pushing up prices. To overcome this weakness there is a need for a stronger auction design. Ozment addresses this issue of collusion, pointed out by Klemperer, by categorizing them into two major areas of concern in the vulnerability market. The first being employee-tester collusion, which comprises of the possibility that a competitor to pay an engineer to insert a backdoor into the program and hence increase its vulnerability. The second being tester-tester collusion, in which testers could agree not to submit reports until the price works in their favor. Having acknowledged these problems Ozment also proposes certain solutions to mould auction design to minimize the occurrence of collusion. By not making public the number of testers a limit can be imposed on their ability to collude and control the auct ion. It can further prevent colluding groups to form and then identify and punish a opposing member through retaliatory bidding. Also by having testers register in advance with a third party the auction provides incentives, in shape of reduced registration charges, for individuals who are actively planning to test the product and claim the reward. This reducing chances of employee-tester collusion. ... The issue of entry deterrence eventually leads to, the third main issue, predatory behavior as some bidder’s receive a modest advantage over the others. Ozment proposes the incorporation of an initial value of the reward in the auction to be of a high level to combat this issue. This creates an incentive to kick start the first few auctions in the series by bringing in a large number of testers. Furthermore it lowers the entry costs for participants in future actions in the sequence. Another solution proposed is by incorporating a reputation reward along with the monetary reward will increase participation of the bidders as well as effectively discourage predatory behavior. Some other factors such as reserve prices, political problems, loopholes, credibility of rules and market structure are also mentioned by Klemperer. However Ozment proposes structural suggestions to strengthen auction design by inserting stronger elements of cultural, legal and managerial tools during the s equence of the auction. Looking at all the above mentioned details it is effective to conclude that it is possible to design an auction as mentioned by Ozment while keeping in mind the factors mentioned by Klemperer. Despite undertaking a development of an auction design keeping in mind the strong enhancements suggested to strengthen it by Ozment, there are still a lot of perverse incentives that might be created. If we look at the fact that the key barriers to auction design are collusion, entry deterrence and a general buyer market power it can lead to the conclusion that design may not matter very much when the entry for a big number of potential bidders is made easy. This can be viewed by looking at the example of government security sales in which