Patent ID: 7720741

Claim:
A method for calculating in accordance with a network that comprises links, a joint distribution of forward prices for using the links in the network, said method comprising: a provision step for providing an observed forward price of a forward contract for each of said links, wherein each of said links has respective bandwidth associated therewith such that the bandwidth is considered a tradable commodity for which the observed forward price is being provided; a determination step for deriving from the observed forward prices a proposed joint distribution of forward prices by applying a forward pricing process to each of said links, thereby generating a geographical arbitrage in the network; an arbitrage reduction step for reducing the geographical arbitrage in the proposed joint distribution of forward prices by a geographical arbitrage reduction value; a verification step for verifying if the proposed joint distribution of forward prices together with the observed forward prices has a defined property in response to the determination step and the arbitrage reduction step; if the verification step results in the defined property being not present, a generation step for generating a property reduction value; and repeating the determination step, the arbitrage reduction step and the verification step, applying the property reduction value to the forward pricing process of each of said links; wherein one or more of the determination step, the arbitrage reduction step, the verification step, and the generation step are executed by a computer.