Patent ID: 7225152

Claim:
In an electronic auction wherein an award for a given auction round is allocated amongst a plurality of highest ranked bidders including at least a first ranked bidder and a second ranked bidder, a method for providing an incentive to the first ranked bidder and the second ranked bidder to each improve their respective bids during the conducting of the auction, comprising: (a) adopting a formula for allocating the award amongst at least the first ranked bidder and the second ranked bidder, wherein a factor of the formula is an actual bid differential between a bid of the first ranked bidder and a bid of the second ranked bidder, and wherein application of the formula to bids of the first and second ranked bidders causes a first portion of the award allocated to the first ranked bidder to increase, and a second portion of the award allocated to the second ranked bidder to decrease as a magnitude of the actual bid differential increases; (b) conducting the electronic auction; and (c) allocating the award between at least the first and second ranked bidders in accordance with the formula and the bids of the first and second ranked bidders.