Method and system for optimal pricing and allocation

• US 20050197857A1
• Filed: 03/04/2005
• Published: 09/08/2005
• Est. Priority Date: 03/05/2004
• Status: Active Grant

• Current Assignee: Barry Forman
• Original Assignee: URSO Limited
• Inventors: Avery, N. Caleb
• Granted Patent: US 7,877,314 B2
• Time in Patent Office: Days
• US Class Current: 705/26.1
• CPC Class Codes: G06Q 30/00 Commerce
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising
• CPC Class Codes: G06Q 30/0601 Electronic shopping [e-shopping]
• CPC Class Codes: G06Q 30/08 Auctions
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A method and system for the determination of optimal pricing and allocation of securities in an open, competitive environment. The method and system may also be used in developing pre-markets of other items that are difficult to price and allocate in a competitive manner, such as the underwriting/securitization of contracts for property; future revenue/earning streams from an asset and/or group of assets; underwritten insurance portfolios, intellectual property and other goods and services. The system of price optimization and allocation is accomplished by interactive feedback of information using a display and including competitive participation of individual members of the public (and/or their agents) or institutional buyers over a data network e.g., the Internet, uncovering the nature and identification of demand in a self-organizing fashion. Demand emerges through participants'"'"' interaction with the system and with each other, via a graphically-supported, interactive reservation process.

Claims

1. Method for pricing and allocating a plurality of units intended to be later sold, comprising the acts of:

accepting a plurality of indications-of-interest to later buy the units, each indication including a request for a quantity of the units at a particular price level;

providing to a plurality of prospective buyers a graphical display of each of the accepted indications;

accepting additional indications after providing the graphical display; and

at a predetermined time, stopping the accepting of additional indications and treating the indications as allocations for subsequent sale.

2. The method of claim 1, wherein a plurality of indications are accepted from one entity.

3. The method of claim 1, wherein the display includes a representation of the quantity of indications accepted over time.

4. The method of claim 1, wherein the price level is an interest yield or price equivalent.

5. The method of claim 1, wherein an accepted indication is predetermined as being binding.

6. The method of claim 1, wherein an accepted indication is predetermined as being non-binding.

7. The method of claim 1, wherein the act of accepting additional indications includes canceling or modifying an earlier accepted indication.

8. The method of claim 1, wherein the number of units available for allocation at a particular price level or interest yield is limited.

9. The method of claim 1, wherein the units will be securities when sold.

10. The method of claim 9, wherein the units will be debt or equity securities when sold.

11. The method of claim 1, wherein the units will be securitized assets or contracts or rights when sold.

12. The method of claim 1, wherein the units will be units of goods or services when sold.

13. The method of claim 1, wherein the display is provided to an agent of a prospective buyer of the units.

14. The method of claim 1, wherein the display for each accepted indication displays along a first axis the price and along a second axis the quantity.

15. The method of claim 1, wherein the display for each accepted indication displays along one axis the quantity and along a second axis the interest yield.

16. The method of claim 14, wherein the display displays along a third axis an additional aspect of each indication.

17. The method of claim 1, further comprising the act of allocating the units amongst the accepted indications.

18. The method of claim 17, wherein the allocation is by the quantity of units, the price, or value of an indication.

19. The method of claim 1, further comprising the act of pricing all units at the same price per unit.

20. The method of claim 19, wherein at least some of the units are priced at a price other than a price level set in the indication.

21. The method of claim 1, further comprising the act of pricing units at different prices to different buyers.

22. The method of claim 1, wherein the indications are submitted via a computer or communications network.

23. The method of claim 1, further comprising the acts of:

determining if the accepted indications are for a total quantity of the units in excess of a predetermined number; and

allocating units amongst the accepted indications.

24. The method of claim 23, wherein the act of allocating includes:

providing additional units.

25. The method of claim 23, wherein the act of allocating includes:

canceling at least part of an indication which specifies a lower price or higher interest yield.

26. The method of claim 1, further comprising the act of pricing the units at the price level set in each accepted indication.

27. The method of claim 1, further comprising the acts of:

accepting a second plurality of indications to later buy units of a second type; and

providing a display of the accepted indications for units of the second type along with the display of the accepted indications for the units of the first type.

28. The method of claim 1, further comprising making at least some of the units available only to a predetermined entity.

29. The method of claim 20, wherein the units for the predetermined entity are priced at a predetermined price per unit or for a total predetermined amount.

30. The method of claim 28, wherein the units for the predetermined entity are priced at a price related to that of units priced for other buyers.

31. The method of claim 1, further comprising the acts of:

canceling an accepted indication; and

transmitting a message indicating the cancellation to the entity that submitted the cancelled indication.

32. The method of claim 1, further comprising the act of transmitting a message to a submitter of an indication regarding a status of the submitted indication.

33. The method of claim 32, wherein the message is transmitted periodically.

34. The method of claim 1, wherein the display includes a representation of a normalization of the accepted indications.

35. The method of claim 1, wherein the display includes a representation of previous offerings of similar units.

36. The method of claim 1, wherein the display includes a representation of indications exceeding a predetermined size.

37. The method of claim 1, wherein the display includes a representation of there being accepted indications associated with a plurality of types of entities.

38. The method of claim 1, wherein the display includes a representation that is static, iterative, or a simulation.

39. The method of claim 1, wherein the display is specific to a particular submitter of an indication.

40. The method of claim 1, wherein the display includes information in addition to the accepted indications.

41. The method of claim 40, wherein the additional information is a calculator.

42. The method of claim 1, wherein the display includes a representation of there being accepted indications exceeding the number of available units.

43. The method of claim 1, wherein the display includes a representation of a price spread between accepted indications.

44. The method of claim 1, wherein the display includes a representation of changes in price over time of the accepted indications.

45. The method of claim 1, wherein the display includes a representation of a projected set of indications.

46. The method of claim 1, wherein the representation includes a representation of the outcomes of game theory-based scenarios.

47. The method of claim 1, wherein the method is carried out as a simulation.

48. The method of claim 1, wherein the display identifies the submitter of at least one displayed indication.

49. The method of claim 1, further comprising the act of setting a price of the units from a function of all the accepted indications.

50. The method of claim 49, wherein the function includes taking an average of the accepted indications.

51. The method of claim 49, the function further including adjusting the average to set the sales price.

52. The method of claim 51, wherein the average is a weighted average.

53. The method of claim 1, further comprising the act of setting a threshold price for indications-of-interest.

54. The method of claim 1, further comprising the act of rewarding submitters of indications-of-interest that are earlier in time.

55. The method of claim 54, wherein the reward is a more favorable price.

56. The method of claim 1, further comprising the act of not accepting an indication that fails to meet a predetermined condition.

57. The method of claim 1, further comprising the acts of:

generating an indication-of-interest using a computer implemented program; and

submitting the generated indication-of-interest.

58. The method of claim 1, further comprising the act of adding information to the display reflecting other than accepted indications.

59. The method of claim 1, further comprising the act of varying a number of the units available for allocation, responsive to the accepted indications.

60. A computer readable medium having computer instructions thereon for performing the method of claim 1.

63. The method of claim 15, wherein the display displays along a third axis an additional aspect of each indication.

64. The method of claim 54, wherein the reward is an additional allocation of the units or price support.

65. The method of claim 1, wherein in one mode, a commission on the later sale of the units is a function of the price of the units.

66. The method of claim 1, wherein the display includes a multiple display or split screens or a tabbed screen for units having different characteristics.

67. The method of claim 1, wherein the display includes a plurality of axes, and at least one axis changes over time.

68. The method of claim 1, further comprising the acts of:

monitoring the indications of interest; and

providing an action responsive to the monitored indications.

61. Method for an indication-of-interest to later buy at least one of plurality of units, comprising the acts of:

viewing a graphical display of each of a plurality of indications-of-interest to buy including a price and a quantity of units to be later sold;

submitting an indication-of-interest to later buy the units, the indication including a price level and a quantity of the units;

having the opportunity to submit an additional indication or change the indication; and

at a predetermined time, the opportunity to submit an additional indication or change the indication being stopped and the indication being accepted as an allocation for subsequent sale.

62. A computer enabled system for pricing and allocating a plurality of units to be later sold, comprising:

a database for holding a plurality of indications-of-interest to later buy the units, each indication including a request for a quantity of units at a particular price level; and

a participant module operatively coupled to the database for accepting the indications from prospective buyers;

wherein the database provides to a plurality of the prospective buyers a graphical display of each of the accepted indications.