Maudlin-vickrey auction method and system for maximizing seller revenue and profit

• US 20050289043A1
• Filed: 01/14/2005
• Published: 12/29/2005
• Est. Priority Date: 11/29/1999
• Status: Abandoned Application

• Current Assignee: Stuart C. Maudlin
• Original Assignee: Stuart C. Maudlin
• Inventors: Maudlin, Stuart C.
• Application Number:
  US11/036,652
• Publication Number:
  US 20050289043A1
• Time in Patent Office: Days
• US Class Current: 705/37
• CPC Class Codes: G06Q 30/08 Auctions
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

A one-sided seller-defined method and system for maximizing a seller'"'"'s profit by withholding supply in Vickery auctions based on a market-derived reserve price calculated from the buyers'"'"' bids in order to maximize revenues and/or profits to the seller(s).

Claims

1. A method of optimizing a Vickrey auction transaction to maximize revenue and profit to the seller comprising the steps of:

calculating a market-derived reserve price from buyers'"'"' bids;

withholding supply based upon said market-derived reserve price;

recording auction parameters;

announcing the auction;

collecting bids in response to said announcing;

sorting collected bids, whereby a set of bids conforming to the recorded auction parameters is defined;

processing bids to determine the selling price, wherein said processing comprises;

calculating a starting revenue by multiplying the highest price bid times the number of items wanted;

calculating a comparative revenue by multiplying the next highest price bid times the number of items wanted by both the highest and next highest bidders;

iteratively performing calculations with each bid in descending price order to determine the revenue realized by the next lowest price times the sum of the items required by the bidder of the next lowest price and all preceding higher bidders;

determining from the calculated revenue figures the optimum selling price and number of units to be sold to realize the maximum revenue; and

selecting winning bids based on the optimum selling price.

4. A method as in claim 1, further comprising determining and recording the auction parameters, including, the item(s) being offered, whether at market bids will be accepted, whether there is an announced reserve price, and if so what it is, whether there is an unannounced reserve price, and if so, what it is, whether bids should have a minimum quantity, and if so, what it is, whether bids should have a maximum quantity, and if so, what it is, whether a prorationing scheme should be used, and if so, what it is, whether to announce the quantity available for sale, the procedure for submitting bids, whether bids may be withdrawn prior to the close of the auction, the procedure for withdrawing bids, delivery requirements, and the closing date and time of the auction.

5. The method of claim 1 further comprising the steps of

announcing the selected auction parameters;

collecting and recording bids consisting essentially of;

the identity of the bidder, quantity bid for, pricing information, whether bidder will accept partial quantity, according to the procedures selected and announced;

rejecting nonconforming bids; and

noting any bid withdrawals.

6. The method of claim 1 comprising the further step of determining if the auction results are to be optimized for seller profit rather than revenue, and, if so, the step of determining a cost function to be included in subsequent calculations.

7. The method of claim 1 further comprising the step of comparing the total number of items available to that required to supply all bidders that bid at or above the optimum selling price to determine if there are additional items available for sale, and, if so, processing bids made at market.

8. The method of claim 1 further comprising the step of processing at market bids to determine if there are sufficient items available to supply all the at market demand, and, if not, further comprising the step of applying the selected prorationing scheme.

2. (canceled)

3. (canceled)

9. A method of providing at least one bid acceptance signal, based on an optimization characteristic, of bids to purchase multiple items that have substantially the same characteristics, the method comprising:

generating a signal representative of an auction offer of at least some of the multiple items;

receiving a set of signals representative of bids,

wherein a set of bid signals is defined and

wherein each of the set of bid signals includes a price component and a volume component;

ranking the set of bids, wherein the ranking is dependent on a function of;

(a) the individual price component and

(b) a sum of all volume components bid at or above the individual price component;

generating a clearing price signal, wherein the generating is dependent on the optimization characteristic and on the set of ranking parameters; and

generating a set of acceptance signals,

wherein each acceptance signal of the set is for a bid having a price component at or above the clearing price,

wherein the acceptance signal includes a price component equal to the clearing price and a volume component equal to the volume accepted, and

wherein the set of acceptance signals comprises an acceptance signal corresponding to each bid signal having a price component equal or greater than the clearing price.

10. A method as in claim 9 wherein the optimization characteristic comprises total revenue.

11. A method as in claim 9 wherein the optimization characteristic comprises profit.

12. A method as in claim 9 wherein the ranking parameter for each individual sales price bid is further dependent on a cost parameter for the sum of all volume components bid at or above the individual price component.

13. A method as in claim 9 wherein the volume component consists essentially of a fixed volume component.

14. A method as in claim 9 wherein the volume component consists essentially of a maximum volume component.

15. A method as in claim 9 wherein the signal representative of the outcome offer is dependent on an at market acceptance flag signal,

a publicly posted reserve price flag signal,

a publicly posted reserve price signal,

a minimum bid quantity flag signal,

a minimum bid quantity signal,

a total quantity available for sale signal,

a private reserve price flag signal,

a minimum/maximum quantity to be sold flag signal, and

a cost signal.

16. A method as in claim 9 wherein said set of signals representative of bids consists essentially of bid signals, wherein each bid signal comprises;

a bidder identity signal,

the volume component,

the price component, and

a partial quantity acceptance flag signal.

17. A method as in claim 9 further comprising:

generating the set of signals representative of the bids before said receiving the set of signals representative of the bids, wherein said generating comprises;

selecting, from a set of submitted bids, those submitted bids having a maximum price component of at market or higher than a reserve price,

whereby a set of consolidated bid signals results and whereby a set of consolidated bid signals results, and

whereby said receiving a set of signals representatives of bids comprises receiving the set of consolidated bid signals.

18. A method as in claim 17 wherein said reserve price comprises a public reserve price.

19. A method as in claim 17 wherein said reserve price comprises a private reserve price.

20. A method as in claim 17 wherein said generating a set of acceptance signals comprises generating a bid status file comprising, for each of the set of consolidated bid signals, a code that identifies the bidder and a code that identifies the quantity awarded.

21. A method as in claim 17 wherein said generating a set of acceptance signals further comprises generating notification signal to at least those bidders having made bids with price components above the clearing price.

22. A method of generating a clearing price signal for an auction of multiple items of substantially similar characteristics in which the seller attaches at least some value to the items, the method comprising:

ranking the set of bids, wherein each of the set of bid signals includes a price component and a volume component, wherein the ranking is dependent on a function of;

(a) the individual price component and

(b) a sum of all volume components bid at or above the individual price component;

generating a clearing price signal, wherein the generating is dependent on the optimization characteristic and on the set of ranking parameters; and

generating a set of acceptance signals,

wherein each acceptance signal of the set is for a bid having a price component at or above the clearing price,

wherein the acceptance signal includes a price component equal to the clearing price and a volume component equal to the volume accepted, and

wherein the set of acceptance signals comprises an acceptance signal corresponding to each bid signal having a price component equal or greater than the clearing price.

23. A method as in claim 22 wherein said ranking is further dependent on a seller value parameter.

24. A method as in claim 23 wherein the seller value parameter is positive.

25. A method as in claim 23 wherein the seller value parameter is negative.