Patent ID: 8781912

Claim:
A computer-implemented method for setting a reserve price for an item to be sold at auction, the method performed on a server and comprising steps of: identifying by the server a plurality of features for evaluating predicted price differentials between the item to be sold and items in a set of comparative items that were previously sold; evaluating by the server the predicted price differentials between the item to be sold and the items in the set of comparative items based on estimated values of state variables for the monetary value of the plurality of item features; calculating by the server values of a distance metric representing distances between the item to be sold and items in the set of comparative items, each calculated distance value indicating a degree of similarity between the item to be sold and a respective item in the set of comparative items; selecting by the server a subset of most similar items from the set of comparative items according to the calculated distances; calculating by the server a weighting function for each item in the subset of most similar items; estimating by the server the reserve price for the item to be sold as a function of the weighting functions and price differentials for the subset of most similar items; transmitting by the server the reserve price over a secure link to a client device; updating by the server the estimated values of state variables as a function of an actual sales price for the item to be sold and a current estimate of uncertainty for the estimated values of state variables, wherein the estimated values of state variables are updated by application of a Kalman filter; and storing the updated values of state variables in a database of the server.