Method and system for conducting electronic auctions with aggregate lotting for transformation bidding

• US 7,346,574 B2
• Filed: 09/06/2001
• Issued: 03/18/2008
• Est. Priority Date: 03/31/1999
• Status: Expired due to Term

• Current Assignee: Ariba Incorporated (SAP SE)
• Original Assignee: Ariba Incorporated (SAP SE)
• Inventors: Rupp, William D., Smith, Christopher J., Bernard, Anthony F.
• Primary Examiner(s): O'Connor; Gerald J.
• Application Number:
  US09/947,949
• Publication Number:
  US 20020032621A1
• Time in Patent Office: 2,385 Days
• Field of Search: 705/26, 705/27, 705/37
• US Class Current: 705/37
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising
• CPC Class Codes: G06Q 30/0234 Rebates after completed purchase
• CPC Class Codes: G06Q 30/0235 constrained by time limit or expiration date
• CPC Class Codes: G06Q 30/0601 Electronic shopping [e-shopping]
• CPC Class Codes: G06Q 30/08 Auctions
• 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

An auction methodology wherein individual demands are bid in lots and an aggregation of several lots is then run as an individual lot to determine if the buyer can attract a lower price offering from bidders by selecting to award the total volume of all of the individual lots to one bidder. A bidder-specific transformation factor for the aggregate lot is computed by combining selected transformed values (one for each lot) that take into account that bidder'"'"'s price offerings for individual lots and the buyer-specified transformation factors for that bidder. Each bidder is then invited to bid a discount percentage for the aggregate lot. This discount percentage is then used along with the bidder-specific transformation factor to generate that bidder'"'"'s transformed value for the aggregate lot. The bidder with the lowest transformed value for the aggregate lot may be selected as the winning bidder. The combination of bid transformation and lot aggregation results in obtaining an optimum bid for the buyer because it allows the buyer to accurately evaluate the bids received for the aggregate lot.

Claims

1. A computer implemented method of conducting an online auction hosted by a server over a network, wherein each of a first and a second bidder is competing for a first lot and a second lot to be auctioned by an auction requester, said method comprising:

receiving electronically at the server at least one bid for each of said first and said second lots from each of said first and second bidders over the network, wherein the first and second bidders are sellers for supplying the first and second lots and wherein the auction requester is a buyer seeking to purchase the first and second lots;

the server waiting until bidding for each of said first and said second lots is closed;

the server inviting by electronically transmitting data to said first and said second bidders over the network to offer a first price and a second price respectively for an aggregate lot after said bidding for each of said first and second lots is closed, wherein said aggregate lot is created by combining said first and said second lots;

for said first bidder, the server presenting a first transformed price for said aggregate lot based on the first price offered for the aggregate lot by the first bidder and one or more first transformed bids received from said first bidder for said first and second lots individually, wherein each of the one or more first transformed bids is based on a first transformation function and a first set of non-comparative bid parameters, and wherein the first transformation function and at least one of the first set of non-comparative bid parameters are known only to the auction requester; and

for said second bidder, the server presenting a second transformed price for said aggregate lot based on the second price offered by the second bidder for the aggregate lot and from one or more second transformed bids received from said second bidder for said first and said second lots individually, wherein each of the one or more second transformed bids is based on a second transformation function and a second set of non-comparative bid parameters, and wherein the second transformation function and at least one of the second set of non-comparative bid parameters are known only to the auction requester.

2. The method of claim 1, further comprises performing the following prior to inviting said first and said second bidders to offer said first and said second prices respectively:

assigning a first set of transformation factors corresponding to the one or more first transformed bids received from said first bidder, wherein each of the first set of transformation factor is indicative of a valuation by the auction requester for the corresponding one of the one or more first transformed bids, and wherein at least one of the first set of transformation factors is known only to the auction requester;

generating a first set of transformed values for said first bidder, wherein said first set of transformed values is generated by applying a corresponding one of the first set of transformation factors to each of the one or more first transformed bids received from said first bidder;

assigning a second set of transformation factors corresponding to the one or more second transformed bids received from said second bidder, wherein each of the second set of transformation factor is indicative of a valuation by the auction requester for the corresponding one of the one or more second transformed bids, and wherein at least one of the second set of transformation factors is known only to the auction requester; and

generating a second set of transformed values for said second bidder, wherein said second set of transformed values is generated by applying a corresponding one of a second set of transformation factors to each of the one or more second transformed bids received from said second bidder.

3. The method of claim 2, wherein presenting said first transformed price for said aggregate lot includes:

selecting a first group of transformed values from said first set of transformed values, and

combining said first price with said first group of transformed values to compute said first transformed price; and

wherein presenting said second transformed price for said aggregate lot includes;

selecting a second group of transformed values from said second set of transformed values, and

combining said second price with said second group of transformed values to compute said second transformed price.

4. The method of claim 3, wherein combining said first price with said first group of transformed values includes multiplying said first price with a first summation generated by adding all transformed values in said first group of transformed values, and wherein combining said second price with said second group of transformed values includes multiplying said second price with a second summation generated by adding all transformed values in said second group of transformed values.

5. The method of claim 3, wherein selecting said first group of transformed values includes selecting a corresponding lot-specific transformed value for each of said first and said second lots from said first set of transformed values, and wherein selecting said second group of transformed values includes selecting a corresponding lot-specific transformed value for each of said first and said second lots from said second set of transformed values.

6. The method of claim 3, wherein said first group of transformed values includes:

a first transformed value from said first set of transformed values, wherein said first transformed value is the lowest transformed value for said first bidder associated with said first lot, and

a second transformed value from said first set of transformed values, wherein said second transformed value is the lowest transformed value for said first bidder associated with said second lot;

and wherein said second group of transformed values includes;

a third transformed value from said second set of transformed values, wherein said third transformed value is the lowest transformed value for said second bidder associated with said first lot, and

a fourth transformed value from said second set of transformed values, wherein said fourth transformed value is the lowest transformed value for said second bidder associated with said second lot.

7. The method of claim 3, further comprising:

reporting to said first bidder each bid received therefrom that corresponds to one of said first group of transformed values; and

reporting to said second bidder each bid received therefrom that corresponds to one of said second group of transformed values.

8. The method of claim 2, further comprising:

allowing said auction requester to specify said first and said second sets of transformation factors.

9. The method of claim 1, further comprising:

comparing said first transformed price with said second transformed price to determine a winning bidder for said aggregate lot from said first and said second bidders.

10. The method of claim 1, wherein inviting said first and said second bidders to offer said first and said second prices respectively includes:

asking said first bidder to offer said first price as a first discount percentage; and

asking said second bidder to offer second price as a second discount percentage.

11. The method of claim 1, further comprising:

determining the first bidder as a leading bidder based on the first transformed price and the second transformed price; and

subsequent to the determining, providing a feedback to said second bidder in real-time with additional discount information for said second price to stay competitive prior to the close of the online auction.