System and method for conducting combinatorial exchanges

• US 7,627,510 B2
• Filed: 03/23/2006
• Issued: 12/01/2009
• Est. Priority Date: 03/23/2005
• Status: Expired due to Fees

• Current Assignee: Regents of the University of California (University of California)
• Original Assignee: Regents of the University of California (University of California)
• Inventors: Jain, Rahul, Kaskiris, Charis, Shu, Jun, Pillai, Nisha Sivasankara, Varaiya, Pravin, Rajagopal, Ram
• Primary Examiner(s): CAMPEN, KELLY SCAGGS
• Application Number:
  US11/389,558
• Publication Number:
  US 20070011080A1
• Time in Patent Office: 1,349 Days
• Field of Search: 705/26, 705/35, 705/36.R, 705/36.T, 705/37, 705/38
• US Class Current: 705/35
• CPC Class Codes: G06Q 30/06 Buying, selling or leasing transactions
• 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
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A double-sided exchange may be an exchange wherein both buyers and sellers provide bids for matching via the exchange. A first interface receives buy bids from buyers and a second interface receives sell bids from sellers. A controller matches the sell bids with the buy bids, yielding matched buy bids and matched sell bids in response thereto so that allocations of the matched buy bids and the matched sell bids maximize a surplus of the exchange. An allocation that substantially maximizes an auctioneer'"'"'s profit and/or announces payments based on sell bids is provided. The announced allocations and prices can be shown to be a substantially competitive equilibrium in some applications.

Claims

1. A method for implementing a double exchange by using a controller coupled to a network, the method comprising:

accepting a first set of buy bids from buyers via a buyer interface, wherein the first set of buy bids are transferred to the controller over the network;

receiving a first set of sell bids from sellers via a seller interface, wherein the first set of sell bids are transferred to the controller over the network;

matching, by an optimization engine in the controller, one or more sell bids with one or more buy bids, yielding one or more matched buy bids and one or more matched sell bids in response thereto;

determining, by the optimization engine in the controller, a uniform settlement price based on a highest ask price among one or more matched sell bids;

scheduling payments so that matched buyers pay a sum of the settlement prices of items in a matched bid for a bundle of the items, and so that matched sellers receive a payment equal to the number of items sold multiplied by the settlement price for a particular item; and

transferring an indication of the scheduled payments to one or more of the buyers or sellers, wherein the indication is transferred over the network.

2. The method of claim 1, wherein the one or more buy bids each include a buy price per bundle, wherein each bundle includes up to (δ

_i) items or things.

3. The method of claim 2, wherein the one or more buy bids further specify maximum bundles needed and maximum bundles demanded for a given buy bid.

4. The method of claim 1, wherein the one or more sell bids each include a sell price per item or thing, a maximum number of items or things offered;

and maximum supply.

5. The method of claim 4, wherein the optimization engine further determines allocations for units sold and allocations of units bought so as to maximize auction surplus.

6. The method of claim 5, wherein the optimization engine operates with a constraint specifying that supply is greater than demand.

7. The method of claim 6, wherein the optimization engine implements a Mixed Integer Program (MIP).