method for conducting an auction of a plurality of heterogeneous items

The invention provides a method for conducting an auction of a plurality of heterogeneous items. The method comprises making, by offering parties, offers to potential accepting parties for the heterogeneous items. The making begins at a specified time with at least some of the potential accepting parties and at least some of the offering parties represented by software-based agents hosted on terminals connected via a communication network. Any acceptance by any accepting party of any offer from any offering party is binding on the offering party immediately, but is not binding on the accepting party until the auction closes. The method also comprises accepting, by an accepting party, a first offer from a first offering party for the heterogeneous item only if the first offer provides a surplus of at least a minimum surplus amount for the heterogeneous item.

FIELD OF THE INVENTION

The present invention generally relates to the field of electronic business and more specifically to online auctions using software-based agents linked via a communication network.

BACKGROUND

The Internet is increasingly being used to conduct electronic business. Advertising is commonplace and many vendors use the Internet for the sale of products and services, including books and toys. Individuals use Internet-based online auction sites for selling a variety of goods that range from second hand books to rare collectible items.

The Internet has several advantages over the traditional media types. Firstly the reach of the Internet is much wider than any other traditional media type available. Thus, an item advertised for sale on the Internet is exposed to potentially more than a billion Internet users all over the world. Secondly, the Internet offers excellent search capabilities to users. State of the art search engines make it possible to type a few keywords and subsequently browse through a substantial amount of information present on the Internet that is related to these keywords. A user in search of a used car (e.g. a Honda Civic) may simply submit the phrase “for sale used Honda Civic” to a search engine to obtain a listing of used Honda Civic cars available for sale on the Internet. Thirdly, the Internet offers a relatively inexpensive way to communicate to users all over the world. Finally, the Internet connected with various public and private computer systems enables users to make use of software-based agents to perform many useful functions in an automated manner.

As a result, an increasing number of virtual electronic marketplaces are being setup on the Internet for the sale and purchase of goods and services. These marketplaces offer a variety of market mechanisms for negotiating contracts between buyers and sellers. The most common mechanisms currently used are fixed price sale, ascending price English auctions, descending price Dutch auctions, name-your-price and request-for-quotes.

In the fixed price sale mechanism, the seller publishes a fixed price for an item. Interested buyers may purchase the item by using an online payment method, such as a credit card or CyberCash, and by supplying a shipping address.

In ascending price English auctions, the sellers list items for sale on an online Internet-based auction site. Potential buyers peruse the item details and place bids on items of interest. The buyers may place additional bids in case of being outbid by other buyers. At close of the auction, the buyer with highest bid wins the item at the final bid price.

In descending price Dutch auctions, sellers offer their items for sale beginning with a high initial price. A seller lowers the price of an item if buyers show no interest in the item. The price is lowered in a stepwise fashion until the seller finds a buyer for the item.

In the name-your-price mechanism, a seller supplies details of the item for which potential buyers can bid. After examining the details of the item, a buyer may make a bid for securing the item. If the bid amount is acceptable to the seller, a contract is concluded and the seller ships the item to the buyer after receiving the payment or payment information.

In the request-for-quotes mechanism, a buyer (typically a large corporate entity or a government body) interested in purchasing an item makes their intent public and calls on various parties to submit quotations for the item. Interested sellers submit offers for the sale of the item and the buyer selects the best offer.

The auction model used for FCC bandwidth auctions (www.fcc.gov) is called the multi-round simultaneous auction model. In this model, all the auctions start simultaneously and end simultaneously, when bidding on each of them stops. The model provides an opportunity to bid for more than one bandwidth license simultaneously, in order to enable a combination of licenses to be won by a bidder who values that combination the most.

Several other auction-like mechanisms having desirable properties have been proposed in research literature. Demange G. et al., in “Multi-item Auctions”, Journal of Political Economy, 1984, 94(4):863-872, describe a generalization of ascending English auctions to multiple heterogeneous auctions. In this mechanism, each item is auctioned independently as an ascending open-cry auction, but all the auctions open and close simultaneously. The bidders place bids on items that provide a maximum surplus. Demange et al. showed that this mechanism leads to a final allocation that can be made substantially close to the minimum competitive equilibrium price. Bertsekas D. P., in “Auction Algorithms for Network Flow Problems: A Tutorial Introduction”, Computational Optimization and Applications, 1992, 1:7-66, also discusses properties of this auction mechanism. Bansal V. and Garg. R., in “Efficiency and Price Discovery in Multi-item Auctions”, ACM SigEcom Exchanges, 2(1), Winter 2001, briefly discuss multi-item auctions.

Crawford V. P. and Knoer E., in “Job Matching with Heterogeneous Firms and Workers”, Econometrica, March 1981, 49(2):437-450, describe a mechanism in the context of firms and workers where workers are assigned to firms. A mechanism (called salary adjustment process) is described that converges to an equilibrium assignment and competitive prices (salaries). Kelso A. S. and Crawford V. P., in “Job Matching, Coalition Formation, and Gross Substitutes”, Econometrica, November 1982, 50(6):1483-1504, extend this mechanism to the case where the bidders have more general demand (called gross substitute). Gul F. and Stacchetti E., in “Walrasian Equilibrium with Gross Substitutes”, Journal of Economic Theory, July 1999, 87(1):95-124, and in “The English Auction with Differentiated Commodities,” Journal of Economic Theory, May 2000, 92(1):66-95, describe a similar auction procedure for generic bidder demands called gross substitutes.

Leonard H. B., in “Elicitation of Honest Preferences for the Assignment of Individuals to Positions”, Journal of Political Economy, 1983, 91:461-479, considers a sealed bid mechanism for allocating items to bidders. Vickery W., in “Counterspeculation, Auctions, and Competitive Sealed Tenders”, Journal of Finance, 1961, 16:8-37, describes a “second price” sealed bid auction mechanism for a single item.

Implementation of the above-described auction mechanisms in Internet-based marketplaces has been limited. However, more traditional and/or simpler mechanisms for selling items have been implemented in various marketplaces. U.S. Pat. No. 5,890,138, issued to Godin et al. on Mar. 30, 1999 and U.S. Pat. No. 5,835,896, issued to Fisher et al. on Nov. 10, 1998, each present a method of conducting online auctions, which enables users to participate using computers connected to the auction system via a computer or communications network.

Examples of online auction web sites on the World Wide Web (WWW) include www.auctions.yahoo.com, and www.ebay.com. The experimental auction server AuctionBot at the University of Michigan, Ann Arbor, USA, supports Vickrey auctions, (m+1)st-price auctions, mth-price auctions, continuous double auctions and chronological match auctions (e.g http://auction.eecs.umich.edu) and is described by Wurman, P. R., Wellman M. P. and Walsh W. E. in “The Michigan Internet AuctionBot: A Configurable Auction Server for Human and Software Agents”, Proceedings of the 2nd International Conference on Autonomous Agents 1998, (Agents'98). Web sites such as www.amazon.com and www.walmart.com have implemented the fixed price sale mechanism. Web sites such as www.priceline.com have implemented the name your price mechanism for airline tickets and other travel related services. Some of these auction sites provide users with a capability to use very simple automated software-based agents, acting on behalf of those users, to place bids. Proxy bidding at the auction web site www.ebay.com is one such example.

In view of the foregoing, a need exists for the online implementation of multi-item generalization of auction mechanisms.

SUMMARY

The invention provides a method for conducting an auction of a plurality of heterogeneous items. The method comprises making, by offering parties, offers to potential accepting parties for the heterogeneous items. The making begins at a specified time with at least some of the potential accepting parties and at least some of the offering parties represented by software-based agents hosted on terminals connected via a communication network. Any acceptance by any accepting party of any offer from any offering party is binding on the offering party immediately, but is not binding on the accepting party until the auction closes.

The method also comprises accepting, by an accepting party, a first offer from a first offering party for one of the heterogeneous items only if the first offer provides a surplus of at least a minimum surplus amount for the heterogeneous item. After accepting the first offer, the method receives, by the accepting party from a second offering party different from the first offering party, a subsequent offer for the heterogeneous item. The subsequent offer is different from the first offer and provides an increased surplus for the heterogeneous item compared to the surplus provided by the first offer.

The method also comprises accepting, by the accepting party, the subsequent offer; and rejecting, by the accepting party, the first offer that was previously accepted. At least some of the making, the accepting. and the rejecting are performed by the software-based agents. The auction closes when no further offers are made for a specified period of time.

DETAILED DESCRIPTION AND BEST MODE

The term ‘item’ is intended to represent either a single good, multiple goods bundled together, a single service, multiple services bundled together, or any combination thereof. The term ‘offer’ is intended to represent the willingness of a seller to sell an item at a specified price.

Software-based agents act on behalf of human participants and may reside on computer systems or on any type of stationary or mobile electronic terminals belonging to buyers, sellers, various third parties (including public servers), commercial service providers or on computer systems of auction sites. In the case that a software-based agent is not hosted on a bidder's computer system or terminal, the agent is linked to the bidder's computer system or terminal via a communications network. Typical communications networks include various types of wired and wireless networks such as wireless local area network (Wireless LAN), wireless metropolitan area networks (Wireless MAN), satellite, wireless wide-area networks (satellite based or others), telecommunications networks, leased lines, virtual leased lines, virtual private networks, intranets, local area networks (LANs), metropolitan area networks (MAN), wide area networks (WAN), Internet or Internet-based networks, and any combination of the foregoing. In particular, the different buyers' agents may reside at several auction sites, publishing their intent to accept offers from sellers of a class of items. Similarly, different sellers' agents may reside on different auction sites, searching for buyers interested in purchasing their items.

The method, system and computer program product described hereinafter include a set of “auction rules” to be followed by multiple buyers and multiple sellers participating in an auction, a class of “seller strategies” to offer items to the buyers, and a class of “buyer strategies” to decide which offers to accept. As a result of the interaction of the buyer and seller strategies, the auction mechanism converges to an allocation of items to buyers at particular prices. For certain specific buyer and seller strategies, the resulting allocation and prices have several desirable properties. Firstly, the allocation is nearly an efficient allocation (i.e. the allocation maximizes the total value in the system). Secondly, the prices discovered are close to maximally competitive prices. The price of an item is maximally competitive if there are no other competitive prices for a particular item that can be increased (A rigorous definition of competitive equilibrium prices and maximum and minimum competitive equilibrium prices is provided by Lloyd S. Shapley and Martin Shubik in their article entitled “The Assignment Game I: The Core”, International Journal of Game Theory, 1972, 1(2):111-130).

For simplicity of exposition, a generic descending price auction mechanism for allocating items to buyers and that, with certain specific conditions, leads to nearly efficient allocation of items and fair and competitive price discovery is described hereinafter. The described auction mechanism may advantageously provide sellers with an opportunity to obtain improved prices compared to the prices obtainable in ascending price English or other auction mechanisms. For a buyer, the auction rules advantageously provide the flexibility to reject a previously accepted offer in the event a better offer is received from a different seller.

In a descending price auction, sellers make offers to buyers that may be accepted or rejected by the buyers. This auction mechanism assists in discovering a free and fair competitive equilibrium price that is favourable to sellers. However, the method, system and computer program product disclosed can equally be applied to other auction or negotiation mechanisms. For example, an ascending price auction wherein buyers make offers that may be accepted or rejected by sellers.

Consider a scenario with n buyers interested in purchasing items from m sellers. For simplicity of exposition, assume that each player is interested in purchasing at most one item and each seller has exactly one item to sell. A more general embodiment of the invention, where each buyer might be interested in purchasing one or more items and each seller may have one or more items to sell, is described hereinafter.

Each buyer attaches a value to each item the buyer is interested in purchasing, which represents the maximum price that the buyer is willing to pay for the item. Similarly, each seller attaches a value to the item to be sold, which represents the cost incurred by the seller in obtaining the item. The sellers also attach a reserve price for their items, which represents the minimum amount a seller expects to receive for an item. It should be assumed that buyers have enough money/budget to buy an item from any of the sellers.

Auction Rules

The auction is conducted according to the following rules. The auction of multiple items by multiple sellers, opens at a pre-specified time when all the potential buyers (or the software agents representing the potential buyers) are expected to be present. A seller (or a software agent acting on behalf of a seller) may offer an item to any buyer (or software agent acting on behalf of a buyer) at any price. Buyers can tentatively accept or reject the offer. If a buyer tentatively accepts an offer, the seller and the buyer are said to be committed to each other. If a buyer, who is already committed, receives an alternative offer that is preferable to the offer already committed to, the buyer can switch from the accepted offer (by rejecting the accepted offer) to the new offer (by tentatively accepting the new offer). The buyer remains committed in the process whereas the seller of the earlier accepted offer becomes uncommitted. An offer is binding on the seller. Unlike the buyers, a seller cannot withdraw an offer unless the offer has been rejected by the buyer. A seller may offer items to buyers only if the seller is not committed (i.e. all the seller's earlier offers have been eventually rejected).

An uncommitted seller may withdraw an item from the auction at any point in time and leave the auction if the seller is unable to sell the item for an amount greater than or equal to the reserve price. The auction closes either at a specified time or when no more offers are made (i.e. every seller is either committed or has withdrawn their item from the auction). After closing, the committed buyers are obliged to purchase the item/s from their respective committed sellers at the last offer prices.

Decreasing Price Offer (DPO) Strategy

A seller strategy, called the Decreasing Price Offer (DPO) strategy is a generalization of a seller's behavior in Dutch auctions. The DPO strategy is described hereinafter.

Each seller offers an item to the buyers, independently. The seller begins with a high initial price and lowers the price by at least a minimum price decrement, as described hereinafter, if there is no demand for the item. Initially, after the start of the auction, the seller offers the item to each of the buyers one-by-one at the initial high price. The order in which the offers are made to the buyers is not fixed and is immaterial. As soon as a buyer accepts the seller's offer, the seller becomes committed and consequently stops offering the item. If a committed buyer switches from the seller's item, the seller again starts offering the item at the current price to the remaining buyers. If no buyer accepts the seller's offer at the current price, the seller lowers the price by at least the minimum price decrement and re-offers the item.

Alternatively, a seller may simply announce a price for an item, which amounts to making an offer to every buyer in the system. Any buyer who does not respond to the offer within a specified time period is assumed to have rejected the offer. A buyer who intends to tentatively accept the offer is expected to respond to the offer within a specified time period. The seller may arbitrarily select and notify one of the buyers who tentatively accepted the seller's offer. The buyer that receives the seller's notification becomes committed to the seller. In the event the buyer was committed earlier, the buyer un-commits from the previous seller by way of sending a notification. The consequently uncommitted seller then re-offers the item at the same price to ascertain whether any other buyer is interested in the offer. If the offer is not accepted within a fixed time period, the seller lowers the price by the minimum price decrement and re-offers the item at the reduced price. For each seller, this process continues until there is either a committed buyer and the auction ends, or the price reaches the reserve price and the seller withdraws the item and leaves the auction.

A seller may set a reserve price that is different to the seller's valuation of an item. If a seller wants a minimum surplus t, the seller will set a reserve price r that gives the seller a surplus of t. In general, a seller's reserve price will increase as the seller's minimum surplus increases. A Decreasing Price Offer (DPO) strategy followed by the seller of an item is denoted as DPO(t) if the seller's minimum surplus amount is t. For instance, when the seller's surplus is linear in price, surplus s is given by the equation s=p−v where v is the seller's valuation of the item (cost of securing the item) and p is the price at which the seller is able to sell the item. In this case, the reserve price for a minimum surplus amount t is given by pr=v+t. If a seller sets a reserve price prequal to the seller's valuation v, then the corresponding surplus t=0 and the corresponding DPO strategy is DPO(0). Thus, DPO generally refers to a class of strategies with different minimum surplus amounts.

Local Surplus Increasing (LSI) Strategy

An initial surplus amount s is associated with each buyer. If a buyer is not committed to any item, the buyer accepts any offer that provides at least surplus s. However, even if already committed to an offer, the buyer accepts any other offer of an item that provides a greater surplus than the surplus provided by the item already committed to. By following this strategy, a buyer's surplus is always increased by positive amounts with every subsequent offer accepted. This strategy is denoted as a Local Surplus Increasing (LSI) strategy. More specifically, if a buyer has an initial surplus amount s, the strategy is denoted as LSI(s). If s=0, then the corresponding strategy of the buyer is LSI(0). Thus, LSI generally refers to a class of strategies with different initial surplus amounts.

In general, a buyer's surplus on an item is a decreasing function of the price at which the item is bought. For instance, if the buyer surplus (denoted as s) is linear in the price then the buyer surplus on an item, at a time t, is given by the equations=v−pt, where v is the buyer's valuation of the item, and ptis the item's price at time t.

According to LSI strategy, a buyer can never be committed to more than one offer at the same time during the auction. As soon as a buyer receives an offer that provides an increased surplus, the buyer un-commits from the current offer and accepts the new offer. Offers that provide a lower surplus than a current surplus are rejected while a buyer waits for item prices to fall. Thus, buyers are guaranteed to obtain a surplus at least equal to the buyer's initial surplus, provided an offer is accepted and an item is secured.

Specific Embodiments of Single and Multiple Online Auction Sites

FIG. 1is a block diagram showing an embodiment of a single online auction site150that hosts buyer agents110,111, . . .110+n, representing buyers100,101, . . .100+n, respectively, and seller agents120,121, . . .120+m representing sellers130,131, . . .130+m, respectively. The buyer and seller agents are typically implemented in software for execution on the computer hardware of an online auction site.

FIG. 2is a block diagram showing an alternative embodiment wherein the sellers130,131, . . .130+m list items for auction on different online auction sites150and151. The number of online auction sites is not limited to two, however, and may extend to any convenient number. The auction sites150and151also host the software-based seller agents120,121, . . .120+m, which represent the sellers120,121, . . .120+m, respectively. The buyers100,101, . . .100+n are represented by the buyer agents110,111, . . .110+n, respectively, which may be hosted on the online auction sites150and151, a buyer's Internet Service Provider's (ISP's) computer, or a buyer's Personal Computer (PC) or Personal Digital Assistant (PDA).

FIG. 3is a block diagram showing an alternative architecture toFIG. 2wherein the buyers100,101, . . .100+n announce their intention to purchase an item and request quotations (invite offers) from prospective sellers130,131, . . .130+m. The request for quotations is published on online auction sites150and151. The number of online auction sites is not limited to two, however, and may extend to any convenient number. The online auction sites150and151also host the buyer agents110,111, . . .110+n that represent the buyers100,101, . . .100+n, respectively. Alternatively, the buyer agents110,111, . . .110+n may be hosted on a seller's Internet Service Provider's (ISP's) computer or on a seller's Personal Computer (PC) or Personal Digital Assistant (PDA).

Generic Descending Price Auction Algorithm

FIG. 4is a flow diagram of a generic descending price auction mechanism that can be practised in accordance with different embodiments of the invention.

The buyer agents110,111, . . .110+n follow a Local Surplus Increasing (LSI) strategy on behalf of their respective buyers110,111, . . .110+n. The seller agents120,121, . . .120+m follow a Decreasing Price Offer (DPO) strategy on behalf of their respective sellers130,131, . . .130+m.

At step410, the auction opens. Next, at step420, each respective seller agent120,121, . . .120+m sets an initial high price on the seller's item. At step430, one or more seller agents120,121, . . .120+m offer their item/s at the current price/s to the interested buyer agents110,111, . . .110+n.

Upon receipt of an offer from a seller agent120,121, . . .120+m, each buyer agent110,111, . . .110+n decides whether to accept or reject the offer at decision step440. This decision is made by the buyer agents110,111, . . .110+n in accordance with an LSI strategy and information relating to the perceived value of the item and the initial surplus amount as specified by the respective buyers100,101, . . .100+n.

If a seller agent's offer is accepted (Y) by any of the buyer agents110,111, . . .110+n, at decision step440, and the buyer switches from an earlier accepted offer (Y), at conditional step450, the buyer rejects the earlier offer at step460and processing continues at step470.

For the case of a buyer agent110,111, . . .110+n that accepted an offer (Y), at decision step440, and that did not accept an earlier offer, the condition of step450cannot not be satisfied. In this case, processing continues at decision step4A0, where auction closing conditions are checked.

If a seller agent's offer is not accepted (N) by any of the buyer agents110,111, . . .110+n, at decision step440, the seller agent120,121, . . .120+m reduces the price of the rejected item by at least a specified minimum price decrement, at step470.

At condition step480, the seller agent120,121, . . .120+m determines whether the reserve price of the item has been reached. This condition check is performed according to the DPO strategies described hereinbefore. If the reserve price has been reached (Y), the seller agent120,121, . . .120+m withdraws the item from auction at step490and leaves the auction. If the auction closing conditions are met, at condition step4A0, the auction closes at step4B0. The auction closing conditions are checked according to the auction rules described hereinbefore.

If reserve price has not been reached (N), at condition step480, or the auction closing conditions are not met (N), at condition step4A0, processing reverts to step430, where one or more uncommitted seller agents120,121, . . .120+n offer their item/s to interested buyer agents110,111, . . .110+n, at the current prices of the item/s.

Embodiments Employing the Generic Auction Algorithm

FIG. 5is a flow diagram of an exemplary auction mechanism that can be practised with the system architecture ofFIG. 1andFIG. 2.

At step510, the sellers130,131, . . .130+m list items for sale on online auction web site/s150,151, . . . . using conventional methods practised in online auction sites. A seller may do this by running a world-wide-web browser such as Netscape™ Communicator Version 4.7 on a personal computer (PC) with a modem, connected to the Internet using the services of an Internet Service Provider (ISP). The online auction sites150,151, . . . , may be implemented using a server hardware system such as RS/6000™, AS/400™ etc., connected to the Internet using services of an ISP. The server hardware system typically runs a commerce-server software such as IBM™ Websphere Commerce Suite Version 5.1 by means of which the auction mechanism, sellers agents120,121, . . .120+m, and the buyer agents110,111, . . .110+n, can be implemented.

At step520, the sellers130,131, . . .130+m instruct their respective agents120,121, . . .120+m, by filling out forms displayed in their web-browsers, which originate from a commerce server running at the online auction sites150,151, . . . . The seller's instructions include information in respect of each item for sale, such as reserve price, initial offer price and a minimum price decrement. This information is passed to the seller agents120,121, . . .120+m, implemented by way of a commerce server at an online auction site150,151, . . . .

When a buyer100,101, . . .100+n (typically using a web-browser and a personal computer connected to the Internet) arrives at an auction web site150,151, . . . , the buyer searches for items of interest (typically by following appropriate “hyperlinks” and/or by filling out appropriate forms). If a buyer100,101, . . .100+n finds an item of interest (Y), at condition step530, the buyer100,101, . . .100+n instructs a respective buyer agent110,111, . . .110+n, at step540. The buyer's instructions include information such as identification of items of interest to the buyer, the buyer's valuation/s of the item/s of interest, and an initial surplus amount in respect of each item.

If a buyer agent110,111, . . .110+n is hosted at an auction site, as shown inFIG. 1, then the buyer agent can be implemented using the commerce server software running on the auction site hardware. In this case, the buyers100,101, . . . ,110+n provide instructions to their respective agents110,111, . . .110+n, by filling out appropriate forms displayed on the buyers' web-browsers.

If the buyer agents110,111, . . .110+n, are hosted elsewhere (say at buyer's personal computer), as shown inFIG. 2, then the agent can be implemented as a software using a generic programming language such as C/C++/Java/Perl etc. In this case, the buyer instructs its agent by giving appropriate input to the agent software running on the buyer's PC.

Thereafter, the buyer's agent contacts the relevant seller's agent, either directly (in case ofFIG. 1), or using a communication network (in case ofFIG. 2), at step550. Processing continues at condition step560, where it is determined whether it is time for the auction to begin.

If no buyer100,101, . . .100+n finds an item of interest (N), at condition step530, processing continues at condition step560, where it is determined whether it is time for the auction to begin.

If it is not yet time for the auction to begin (N), at condition step560, processing reverts to condition step530, thus permitting additional buyers to join the auction. The start time of the auction is typically specified by the auctioneer.

When the start time of auction is reached (Y), at condition step560, processing continues at step410of the generic auction algorithm ofFIG. 4. When the generic auction algorithm ofFIG. 4ends after auction closing, at step4B0ofFIG. 4, processing returns to step570ofFIG. 5. At step570, all the committed buyers and sellers transact in accordance with the offers committed to.

FIG. 6is a flow diagram of an exemplary auction mechanism that can be practised with the system architecture ofFIG. 3.

At step610, the buyers100,101, . . .100+n list their intention to purchase one item from a specific class of items (e.g. used cars, airline tickets, hotel accommodation etc.) on online auction sites150,151, . . . and invite offers (request quotations) from the prospective sellers130,131, . . .130+m. The buyers may follow conventional methods of web-browsing to list their intent to purchase. The invitations are published on online auction web sites150,151, . . . .

A buyer100,101, . . .100+n can list an intention to purchase an item on an online auction site150,151, . . . using a world-wide-web browser on a personal computer (PC) with a modem, connected to the Internet using the services of an ISP. An online auction site150,151, . . . may be implemented using a server hardware system such as RS/6000™, AS/400™ etc., connected to the Internet using services of an ISP. The server hardware system typically runs a commerce-server software such as IBM™ Websphere Commerce Suite Version 5.1 by means of which the auction mechanism, seller agents130,131, . . .130+m, and buyer agents110,111, . . .110+n can be implemented.

At condition step620, a seller130,131, . . .130+m browses the auction sites150,151, . . . typically using a world-wide-web browser on a personal computer (PC) with a modem connected to the Internet, to find buyers that may be interested in an item the seller wishes to sell. If the seller finds one more buyers100,101, . . .100+n that may be interested in the item (Y), the seller130,131, . . .130+m instructs a respective seller agent120,121, . . .120+m, at step630. The seller's instructions include information relating to specifications of the item of interest, an initial price for the item, a reserve price for the item, a minimum price decrement in respect of the item, and a list of buyer agents110,111, . . .110+n corresponding to the buyers interested in the item.

If the seller agents120,121, . . .120+m, are hosted at an auction site, then the seller agents can be implemented using the commerce server software. In this case a seller130,131, . . .130+m, provides instructions to a respective agent by filling out an appropriate form displayed on the seller's web-browser.

If the seller agents120,121, . . .120+m, are hosted elsewhere (say, on a seller's personal computer), then the agents can be implemented in software, using a generic programming language such as C/C++/Java/Perl etc. In this case, a seller130,131, . . .130+m instructs a respective agent by providing appropriate input to the agent software running on the seller's PC.

Once a seller agent120,121, . . .120+m has been instructed at step630, the seller agent sends the item specifications to the interested buyer agents110,111, . . .110+n, at step640. The item is typically offered to each buyer agent110,111, . . .110+n, individually.

When a buyer agent110,111, . . .110+n receives an item specification from seller agent120,121, . . .120+m, the buyer agent110,111, . . .110+n notifies the respective buyer100,101, . . .100+n of the specification of the item, at step650. The buyer agent typically notifies the corresponding buyer100,101, . . .100+n, either by sending an email to the buyer's email address, or by listing the item specifications on the web-page corresponding to the buyer's listed intention to purchase.

The buyers100,101, . . .100+n evaluate the item specification and instruct the respective buyer agents110,111, . . .110+n, typically using a personal computer connected to the Internet, at step660. The buyers' instructions include information regarding the buyers' valuation of the item and an initial surplus amount for the item.

At condition step670, the software at the online auction site150,151, . . . determines whether the start time of the auction has been reached. If the start time has not yet been reached (N), processing reverts to condition step620, thus permitting additional sellers130,130, . . .130+m to join the auction.

If the start time of auction has been reached (Y), at condition step670, processing continues at step410of the generic auction algorithm ofFIG. 4. When the generic auction algorithm ofFIG. 4ends after auction closing, at step4B0ofFIG. 4, processing returns to step680ofFIG. 6. At step680, all the committed buyers and sellers transact in accordance with the offers committed to.

If a seller130,131, . . .130+m, is unable to find a buyer100,101, . . .100+n interested in his item (N), at condition step620, the seller leaves the auction site and processing continues at condition step670.

Generalization to Combined Diverse Seller and Buyer Methodologies

In practice, a combination of the architectures shown inFIGS. 2 and 3may arise. Some of the sellers130,131, . . .130+m might make their offers known by listing their items on known online auction sites150and151. The number of online auction sites is not limited to two, however, and may extend to any convenient number. The online auction sites150and151also host the seller agents130,131, . . .130+m, which follow a DPO strategy. Some other of the sellers130,131, . . .130+m may search the communication network (Internet) for buyers100,101, . . .100+n interested in their offers and send them offers individually. The agents of such buyers are typically hosted on the buyer's own personal computer systems or a computer system of the buyer's Internet Service Provider (ISP).

Similarly, some of the buyers100,101, . . .100+n might make their intention to purchase an item, and request for offers, known on online auction sites150and151. The auction sites150and150also typically host the software agents110,111, . . .110+n of the buyers100,101, . . .100+n, which follow an LSI strategy. Some of the other buyers100,101, . . .100+n may search the communication network (Internet) for open offers and monitor item/s of interest, as the price/s of the item/s reduce, and follow an LSI strategy in accepting the offers.

Generalization to Multiple Heterogeneous Items

A buyer100,101, . . .100+n may be interested in purchasing more than one item. Accordingly, a buyer100,101, . . .100+n may accept more than one offer and may thus have more than one accepted offer at any given time. In this case, the buyer100,101, . . .100+n informs a respective buyer agent110,111, . . . ,110+n about the buyer's preferences. A buyer agent110,111, . . .110+n accepts a new offer if the new offer increases the total surplus of the buyer. Alternatively, a buyer agent110,111, . . .110+n may accept a new offer and un-commit from one or more tentatively accepted offers, if doing so increases the buyer's surplus.

A seller130,131, . . .130+m may have more than one item for sale. In this case, the seller130,131, . . .130+m instructs the corresponding agent120,121, . . .120+m, accordingly. A seller agent120,121, . . .120+m either offers the items one-by-one or offers all of the items all at once.

Computer Implementation

The auction mechanism/s and/or software-based agents for bidding may either be implemented as a standalone program running on the user's computer (client-side agents), subroutines that are a part of the auction web site (server-side agents) or as a software code which executes on a generic public infrastructure such as compute servers (third party agents).

The auction mechanism/s and/or software-based agents can be implemented using one or more computer program product/s in conjunction with a computer system700as shown inFIG. 7. In particular, the auction mechanism/s and/or software-based agents can be implemented as software, or computer readable program code, executing on the computer system700. The computer system700may comprise any commercially available computer system interconnected over a communication network. Examples of computer systems include personal computers (PCs) and servers like Netfinity™ and RS/6000™, AS/400™, S/390™ etc. sold by IBM™ and similar such servers sold by other companies.

The computer system700includes a computer750, a video display710, and input devices730,732. In addition, the computer system700can have any of a number of other output devices including line printers, laser printers, plotters, and other reproduction devices connected to the computer750. The computer system700can be connected to one or more other computers via a communication interface764using an appropriate communication channel740such as a modem communications path, an electronic network, or the like. The network may include a local area network (LAN), a wide area network (WAN), an Intranet, and/or the Internet720.

The computer750includes a control module766, a memory770that may include random access memory (RAM) and read-only memory (ROM), an input/output (I/O) interface772, a video interface760, and one or more storage devices generally represented by the storage device762. The control module766is implemented using a central processing unit (CPU) that executes or runs a computer readable program code that performs a particular function or related set of functions.

The video interface760is connected to the video display710and provides video signals from the computer750for display on the video display710. User input to operate the computer750can be provided by one or more of the input devices730,732via the I/O interface772. For example, a user of the computer750can use a keyboard as input device730and/or a pointing device such as a mouse732. The keyboard730and the mouse732provide input to the computer750. The storage device762can consist of one or more of the following: a floppy disk, a hard disk drive, a magneto-optical disk drive, CD-ROM, magnetic tape or any other of a number of non-volatile storage devices well known to those skilled in the art. Each of the elements in the computer system750is typically connected to other devices via a bus780that in turn can consist of data, address, and control buses.

The method steps for the auction mechanism/s and/or the software-based agents can be effected by instructions in the software that are carried out by the computer system700. Again, the software may be implemented as one or more modules for implementing the method steps.

In particular, the software may be stored in a computer readable medium, including the storage device762or that is downloaded from a remote location via the communication interface764and communications channel740from the Internet720or another network location or site. The computer system700includes the computer readable medium having such software or program code recorded such that instructions of the software or the program code can be carried out.

The computer system700is provided for illustrative purposes and other configurations can be employed without departing from the scope and spirit of the invention. The foregoing is merely an example of the types of computers or computer systems with which the embodiments of the invention may be practised. Typically, the processes of the embodiments are resident as software or a computer readable program code recorded on a hard disk drive as the computer readable medium, and read and controlled using the control module766. Intermediate storage of the program code and any data including entities, tickets, and the like may be accomplished using the memory770, possibly in concert with the storage device762.

In some instances, the program may be supplied to the user encoded on a CD-ROM or a floppy disk (both generally depicted by the storage device762), or alternatively could be read by the user from the network via a modem device connected to the computer750. Still further, the computer system700can load the software from other computer readable media. This may include magnetic tape, a ROM or integrated circuit, a magneto-optical disk, a radio or infra-red transmission channel between the computer and another device, a computer readable card such as a PCMCIA card, and the Internet720and intranets including email transmissions and information recorded on Internet sites and the like. The foregoing are merely examples of relevant computer readable media. Other computer readable media may be practised without departing from the scope and spirit of the invention.

The auction mechanism/s and/or software-based agents can be realised in a centralized fashion in one computer system700, or in a distributed fashion where different elements are spread across several interconnected computer systems.

Communication Network Implementation

A typical communication network may include any of nodes (routers/switches/hubs, satellite transponders, etc.), end-systems (such as computers, PDAs, mobile phones etc.), links (wired or wireless such as optical fiber, telecommunication lines, Ethernet cables, WLAN, infra-red links, microwave links, satellite links etc.) that provide a communication path from one node to one or more nodes/end-systems and from one end system to one or more nodes/end-systems.

Incorporations by Cross-Reference

“Simultaneous Online Independent Auctions with Discrete Bid Increments”, by Bansal V. and Garg R., yet to be published in the Electronic Commerce Research Journal, is hereby incorporated herein in its entirety and accompanies this specification.

“Descending Price Multi-item Auctions”, a confidential IBM Internal Report by Garg R. and Mishra D., is hereby incorporated herein in its entirety and accompanies this specification.

In the foregoing, a method, a system, and a computer program product for online auction of multiple heterogeneous items using software-based agents are described. While only a small number of embodiments are described, it will be apparent to those skilled in the art in view of this disclosure that numerous changes and/or modifications can be made without departing from the scope and spirit of the invention.