Truth Revealing Market Equilibrium

• US 20100312651A1
• Filed: 08/10/2010
• Published: 12/09/2010
• Est. Priority Date: 09/15/2005
• Status: Active Grant

• Current Assignee: Microsoft Technology Licensing LLC (Microsoft Corporation)
• Original Assignee: Microsoft Corporation
• Inventors: Jain, Kamal, Talwar, Kunal
• Granted Patent: US 8,073,766 B2
• Time in Patent Office: Days
• US Class Current: 705/14.71
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising
• CPC Class Codes: G06Q 30/0251 Targeted advertisements
• CPC Class Codes: G06Q 30/0273 Determination of fees for advertising
• CPC Class Codes: G06Q 30/0275 Auctions
• CPC Class Codes: G06Q 30/0277 Online advertisement
• 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 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

To use market clearing methods to determine market equilibrium, a market clearing situation is established by determining a number of items to be sold at the market price and allotting a number of pseudo items assignable to bids below the market price. Once bids are received for the items, using the number of pseudo items and the actual items as the supply side, and the total funds bid as the demand side, a market clearing price is determinable using a market clearing equilibrium model. Funds assigned to pseudo items are returned or not charged. Further, by selling items only to bids exceeding the market clearing price, such as by setting the market price incrementally above the market clearing price, bidders are encouraged to submit bid prices bid reflecting what the items are worth to them instead of attempting to bid strategically to guess or set the market price.

Claims

1. A method performable by a processing unit for setting a market price, the method comprising:

determining a number of items to be sold at the market price;

creating a pseudo commodity including a number of pseudo items assignable to bids below the market price;

receiving a plurality of bids for the items; and

using the number of items to be sold and the number of pseudo items as a supply side and the plurality of bids as the demand side, determining a market clearing price usable in setting the market price.

2. A method of claim 1, wherein the number of items to be sold represents an estimated number of items is derived from at least one of:

a known number of items available to be sold;

a body of historical data representing an actual number of items sold; and

a projection of a number of items to be sold.

3. A method of claim 1, further comprising:

setting the market price to one of equal to or greater than the market clearing price;

assigning each of the number of items to each of the bids at least equivalent to the market price;

assigning each of the number of pseudo items to each of bids less than the market price; and

one of not charging and refunding each of a plurality of bidders submitting each of the bids to which each of the number of pseudo items is assigned.

4. A method of claim 3, further comprising determining the number of pseudo items such that a price of each of the pseudo items is equivalent to each of the bids to which each of the pseudo items is assigned.

5. A method of claim 4, wherein the number of pseudo items is determined using a binary search algorithm.

6. A method of claim 1, wherein the market price is being set for an auction wherein:

the auction includes a number of rounds where the number of items to be sold and the number of pseudo items of the pseudo commodity are available for sale during each of the number of rounds; and

each of the plurality of bids includes a bid price and an auction budget.

7. A method of claim 6, wherein the plurality of bids includes:

a plurality of actual bids received from a number of actual bidders; and

a plurality of pseudo bids from a number of pseudo bidders, where;

a number of pseudo bidders is equal to the number of items plus one to represent the pseudo commodity; and

each of the pseudo bids includes a pseudo bid price and a pseudo auction budget equal to a product of the reserve price and the number of rounds.

8. A method of claim 7, wherein each of the items includes an advertising opportunity in which a selectable advertisement is presentable, wherein:

the advertising opportunity is associated with a first likelihood of the advertising opportunity being selected;

the selectable advertisement is associated with a second likelihood of the advertisement being selected, the second likelihood including;

for each of the advertisements associated with actual bids, the second likelihood includes one of an estimated and a measured likelihood; and

for each of the pseudo bids, the second likelihood is set to one; and

the market clearing price is determined by maximizing a utility of each of the actual bidders and the pseudo bidders where the utility is the product of the bid price, the first likelihood, and the second likelihood.

9. A method of claim 8, further comprising ensuring that only a single advertisement for a single bidder is presented on a single screen using one of:

a matching polytope;

an assignment polytope; and

a double stochastic matrix.

10. A method of claim 1, wherein the market clearing price is determined using a Fisher equilibrium model.

11. A computer-readable medium having computer-useable instructions embodied thereon for executing the method of claim 1.

12. A system for setting a market price, the system comprising one or more processing unit programmed to perform actions comprising:

determining a number of items to be sold at the market price;

creating a pseudo commodity including a number of pseudo items assignable to bids below the market price;

receiving a plurality of bids for the items; and

using the number of items to be sold and the number of pseudo items as a supply side and the plurality of bids as the demand side, determining a market clearing price usable in setting the market price.

13. The system of claim 12, further comprising the one or more processing unit programmed to perform actions comprising:

setting the market price to one of equal to or greater than the market clearing price;

assigning each of the number of items to each of the bids at least equivalent to the market price;

assigning each of the number of pseudo items to each of bids less than the market price; and

one of not charging and refunding each of a plurality of bidders submitting each of the bids to which each of the number of pseudo items is assigned.

14. The system of claim 12, wherein the number of items to be sold represents an estimated number of items is derived from at least one of:

a known number of items available to be sold;

a body of historical data representing an actual number of items sold; and

a projection of a number of items to be sold.

15. The system of claim 12, wherein the market price is being set for an auction wherein:

the auction includes a number of rounds where the number of items to be sold and the number of pseudo items of the pseudo commodity are available for sale during each of the number of rounds; and

each of the plurality of bids includes a bid price and an auction budget.

16. The system of claim 15, wherein the plurality of bids includes:

a plurality of actual bids received from a number of actual bidders; and

a plurality of pseudo bids from a number of pseudo bidders, where;

a number of pseudo bidders is equal to the number of items plus one to represent the pseudo commodity; and

each of the pseudo bids includes a pseudo bid price and a pseudo auction budget equal to a product of the reserve price and the number of rounds.

17. The system of claim 16, wherein each of the items includes an advertising opportunity in which a selectable advertisement is presentable, wherein:

the advertising opportunity is associated with a first likelihood of the advertising opportunity being selected;

the selectable advertisement is associated with a second likelihood of the advertisement being selected, the second likelihood including;

for each of the advertisements associated with actual bids, the second likelihood includes one of an estimated and a measured likelihood; and

for each of the pseudo bids, the second likelihood is set to one; and

the market clearing price is determined by maximizing a utility of each of the actual bidders and the pseudo bidders where the utility is the product of the bid price, the first likelihood, and the second likelihood.