Practical secrecy-preserving, verifiably correct and trustworthy auctions

Abstract

We present a practical protocol based on homomorphic cryptography for conducting provably fair sealed-bid auctions. The system preserves the secrecy of the bids, even after the announcement of auction results, while also providing for public verifiability of the correctness and trustworthiness of the outcome. No party, including the auctioneer, receives any information about bids before the auction closes, and no bidder is able to change or repudiate any bid. The system is illustrated through application to first-price, uniform-price and second-price auctions, including multi-item auctions. Empirical results based on an analysis of a prototype demonstrate the practicality of our protocol for real-world applications.