Patent ID: 7536337

Claim:
A method for computing payment discounts awarded to a plurality of winning agents in an exchange, said method comprising: computing, by a processor, a Vickrey discount to said plurality of winning agents in a cleared exchange as the difference between available surplus with all agents present minus available surplus without said plurality of winning agents, wherein the available surplus is a difference between an asked for payment from sellers and a bid payment from buyers, and wherein the winning agents are sellers and buyers matched to one another; and computing, by the processor, said payment discounts by adjusting said Vickrey discounts so as to constrain said exchange to budget-balance, wherein said Vickrey discounts are equal to or less than the available surplus, and wherein said adjusting step further comprises: minimizing a distance function under said budget-balance constraint and one or more bounding constraints, said distance function comprising a metric of the distance between said payment discounts and said Vickrey discounts; deriving a parameterized payment rule for said distance function; determining an allowable range of parameters so as to maintain budget-balance; and selecting values for said parameters within said allowable range, wherein said values for said parameters are selected within said allowable range so as to reduce agent manipulation across said plurality of winning agents upon determining each agent's bidding strategy as a function of said parameters.