U.S. patent application number 11/260001 was filed with the patent office on 2006-03-02 for enhanced auction mechanism for online transactions.
Invention is credited to Pierfrancesco La Mura, Yoav Shoham, Moshe Tennenholtz.
Application Number | 20060047581 11/260001 |
Document ID | / |
Family ID | 24575102 |
Filed Date | 2006-03-02 |
United States Patent
Application |
20060047581 |
Kind Code |
A1 |
La Mura; Pierfrancesco ; et
al. |
March 2, 2006 |
Enhanced auction mechanism for online transactions
Abstract
An auction system and method for suitable for use with online
transactions which provide a plurality of enhanced auctions is
disclosed. The present invention extends, augments or otherwise
enhances various auction elements including, for example, the
selection of participants, the grouping of participants, the moves
made by participants, the bidding process of participants, the
information revelation process, the auction closing process, and
the auction clearing process, among others. In addition, enhanced
auction modules may be used separately or together during the
auction process.
Inventors: |
La Mura; Pierfrancesco;
(Palo Alto, CA) ; Tennenholtz; Moshe; (Palo Alto,
CA) ; Shoham; Yoav; (Palo Alto, CA) |
Correspondence
Address: |
FENWICK & WEST LLP
SILICON VALLEY CENTER
801 CALIFORNIA STREET
MOUNTAIN VIEW
CA
94041
US
|
Family ID: |
24575102 |
Appl. No.: |
11/260001 |
Filed: |
October 26, 2005 |
Related U.S. Patent Documents
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Application
Number |
Filing Date |
Patent Number |
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09642078 |
Aug 18, 2000 |
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11260001 |
Oct 26, 2005 |
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Current U.S.
Class: |
705/26.3 |
Current CPC
Class: |
G06Q 30/08 20130101;
G06Q 40/04 20130101 |
Class at
Publication: |
705/026 |
International
Class: |
G06Q 30/00 20060101
G06Q030/00 |
Claims
1. In a computer device, an online auction system having at least
one seller member (seller) and at least one buyer member (bidder),
said auction system comprising: a) an interface module configured
to provide a user interface between the seller and the bidder; b) a
transaction module operatively coupled for communication to said
interface module configured to manage transactions associated with
moves made by the seller and the bidder in conjunction with a sale
of an item by the seller; and c) a mechanism module operatively
coupled for communication to said transaction module, said
mechanism module defining a plurality of distinct auction rules,
said transaction module further configured to carry out
transactions according to at least one auction rule defined by said
mechanism module.
2. The auction system of claim 1, wherein said mechanism module
comprises rule defining programming associated with temporal
auction transactions, wherein said rule defining programming is
configured to: receive a bid from a bidder for an item for sale;
receive in conjunction with said bid an expiration condition for
said bid; and cancel said bid when said expiration condition is
met.
3. The auction system of claim 2, wherein said rule defining
programming is further configured to allow the seller to close the
auction at any time.
4. The auction system of claim 1, wherein said mechanism module
comprises rule defining programming associated with temporal
negotiation transactions, wherein said rule defining programming is
configured to: receive a bid offer from a bidder for an item for
sale; receive in conjunction with said bid offer a bid expiration
condition for said bid offer; cancel said bid offer when said bid
expiration condition is met; receive a sale offer from a seller for
an item for sale; receive in conjunction with said sale offer a
sale expiration condition for said sale offer; and cancel said sale
offer when said sale expiration condition is met.
5. The auction system of claim 4, wherein said rule defining
programming is further configured to allow the seller to close the
auction at any time.
6. The auction system of claim 4, wherein said rule defining
programming is further configured to allow the buyer to close the
auction at any time.
7. The auction system of claim 1, wherein said mechanism module
comprises rule defining programming associated with aggregated
combinatorial auction transactions, said rule defining programming
configured to: receive at least one item for sale from each of a
plurality of sellers; aggregate each said item for sale into a
unified combinatorial auction; offer for sale items in said unified
combinatorial auction; receive a bid for an item in said unified
combinatorial auction from a bidder; receive in conjunction with
said bid, a substitute command indicating that said bid is a
substitute for another bid, said substitute command further
indicating the number of units requested by said bidder; allocate
items to highest bidders at the close of auction; and limit said
allocation of items to said bidder according to the number of units
requested by said bidder.
8. The auction system of claim 1, wherein said mechanism module
comprises rule defining programming associated with bundle-based
auction transactions, said rule defining programming configured to:
receive from a seller a plurality of goods for sale, said plurality
of goods defining a bundle; receive from the seller a shared
reserve price for the bundle; open sale of the plurality of goods;
receive bids for said plurality of goods from bidders; and close
sale of the plurality of goods when the total bid amounts for the
plurality of goods satisfies the shared reserve price.
9. The auction system of claim 1, wherein said mechanism module
comprises rule defining programming associated with reverse payment
auction transactions, said rule defining programming configured to:
receive a plurality of identical goods for sale; receive bids for
said goods from a plurality of bidders; and provide a rebate to the
highest bidder.
10. The auction system of claim 1, wherein said mechanism module
comprises rule defining programming associated with conditional
auction transactions, said rule defining programming configured to:
receive at least one item for sale by a seller; receive from a
bidder at least one bid for the item; receive a condition event
attached to the sale of said item; determine if said condition
event has occurred; and allocate terms of sale according to the
occurrence of said condition event.
11. The auction system of claim 1, wherein said mechanism module
comprises rule defining programming associated with auction with
price-warranty transactions, said rule defining programming
configured to: receive at least one item for sale by a seller;
receive a price warranty associated with the sale of said item,
said price warranty indicating the warranty terms; and list the
item for sale including the price warranty terms.
12. A networked auction system for operating on-line auctions for
sale of goods or services, comprising: an auction modeler for
specifying a plurality of distinct auction models for sale of at
least one good or service, wherein an auction model includes at
least one guideline for dynamic evolution of an auction; an auction
manager coupled with said auction modeler for managing operation of
at least one selected auction model from among the plurality of
distinct auction models, said auction manager processing input from
at least one auction participant and dynamically generating output
compliant with the at least one guideline for the at least one
selected auction model; and a user interface coupled with said
auction manager for receiving dynamic input from at least one
auction participant and passing an indication of the dynamic input
to said auction manager, and for receiving the dynamically
generated output from said auction manager and passing a
representation of the output to at least one auction
participant.
13. The networked auction system of claim 12 wherein auction
participants include at least one seller and at least one
bidder.
14. The networked auction system of claim 12 wherein auction
participants include one seller and at least one bidder.
15. The networked auction system of claim 12 wherein auction
participants include one bidder and at least one seller.
16. The networked auction system of claim 12 wherein guidelines for
dynamic evolution of an auction include guidelines for selection of
auction participants.
17. The networked auction system of claim 12 wherein guidelines for
dynamic evolution of an auction include guidelines for disclosure
of information to auction participants.
18. The networked auction system of claim 12 wherein guidelines for
dynamic evolution of an auction include guidelines for valid inputs
from auction participants.
19. The networked auction system of claim 12 wherein guidelines for
dynamic evolution of an auction include guidelines for closing the
auction.
20. The networked auction system of claim 12 wherein guidelines for
dynamic evolution of an auction include guidelines for determining
at least one winner for the auction.
21. The networked auction system of claim 20 wherein guidelines for
dynamic evolution of an auction include guidelines for determining
terms of purchase for the at least one winner of the auction.
22. The networked auction system of claim 30 wherein guidelines for
dynamic evolution of an auction include guidelines for determining
terms of sale for the at least one winner of the auction.
23. The networked auction system of claim 12 wherein the dynamic
input from at least one auction participant includes a bid amount
for purchase of at least one good or service.
24. The networked auction system of claim 23 wherein the dynamic
input from at least one auction participant further includes at
least one condition associated with the bid amount for purchase of
at least one good or service.
25. The networked auction system of claim 24 wherein the at least
one condition associated with the bid amount for purchase of at
least one good or service includes a time of expiration for the bid
amount.
26. The networked auction system of claim 12 wherein the dynamic
input from at least one auction participant includes a bid amount
for sale of at least one good or service.
27. The networked auction system of claim 26 wherein the dynamic
input from at least one auction participant further includes at
least one condition associated with the bid amount for sale of at
least one good or service.
28. The networked auction system of claim 27 wherein the at least
one condition associated with the bid amount for sale of at least
one good or service includes a time of expiration for the bid
amount.
29. A method for operating on-line auctions for sale of goods or
services, comprising: specifying a plurality of distinct auction
models for sale of goods or services, wherein an auction model
includes at least one guideline for dynamic evolution of an
auction; managing operation of at least one selected auction model
from among the plurality of distinct auction models, comprising
processing input from at least one auction participant and
dynamically generating output compliant with the at least one
guideline for the at least one selected auction model; receiving
dynamic input from at least one auction participant; and passing a
representation of the dynamically generated output to at least one
auction participant.
30. The method of claim 29 wherein auction participants include at
least one seller and at least one bidder.
31. The method of claim 29 wherein auction participants include one
seller and at least one bidder.
32. The method of claim 29 wherein auction participants include one
bidder and at least one seller.
33. The method of claim 29 wherein guidelines for dynamic evolution
of an auction include guidelines for selection of auction
participants.
34. The method of claim 29 wherein guidelines for dynamic evolution
of an auction include guidelines for disclosure of information to
auction participants.
35. The method of claim 29 wherein guidelines for dynamic evolution
of an auction include guidelines for valid inputs from auction
participants.
36. The method of claim 29 wherein guidelines for dynamic evolution
of an auction include guidelines for closing the auction.
37. The method of claim 29 wherein guidelines for dynamic evolution
of an auction include guidelines for determining at least one
winner for the auction.
38. The method of claim 37 wherein guidelines for dynamic evolution
of an auction further include guidelines for determining terms of
purchase for the at least one winner of the auction.
39. The method of claim 37 wherein guidelines for dynamic evolution
of an auction further include guidelines for determining terms of
sale for the at least one winner of the auction.
40. The method of claim 29 wherein the dynamic input from at least
one auction participant includes a bid amount for purchase of at
least one good or service.
41. The method of claim 40 wherein the dynamic input from at least
one auction participant further includes at least one condition
associated with the bid amount for purchase of at least one good or
service.
42. The method of claim 41 wherein the at least one condition
associated with the bid amount for purchase of at least one good or
service includes a time of expiration for the bid amount.
43. The method of claim 29 wherein the dynamic input from at least
one auction participant includes a bid amount for sale of at least
one good or service.
44. The method of claim 43 wherein the dynamic input from at least
one auction participant further includes at least one condition
associated with the bid amount for sale of at least one good or
service.
45. The method of claim 44 wherein the at least one condition
associated with the bid amount for sale of at least one good or
service includes a time of expiration for the bid amount.
46. A computer-readable storage medium storing program code for
causing a computer to perform the steps of: specifying a plurality
of distinct auction models for sale of goods or services, wherein
an auction model includes at least one guideline for dynamic
evolution of an auction; managing operation of at least one
selected auction model from among the plurality of distinct auction
models, comprising processing input from at least one auction
participant and dynamically generating output compliant with the at
least one guideline for the at least one selected auction model;
receiving dynamic input from at least one auction participant; and
passing a representation of the dynamically generated output to at
least one auction participant.
Description
RELATED APPLICATION
[0001] This application claims the benefit under 35 U.S.C.
.sctn.120 as a continuation of U.S. application Ser. No.
09/642,078, entitled "Enhanced Auction Mechanism for Online
Transactions," by Pierfrancesco La Mura et al., which was filed on
Aug. 18, 2000, and which is herein incorporated by reference.
BACKGROUND OF THE INVENTION
[0002] 1. Field of the Invention
[0003] This invention pertains generally to online transactions.
More particularly, the invention is an auction system and method
suitable for use with online transactions which provides a
plurality of enhanced auction mechanisms which may be used alone or
in combination with the others. The present invention augments and
enhances current auction schemes to provide a more entertaining and
useful online transaction environment.
[0004] 2. The Prior Art
[0005] The use of the global information network known as the
Internet as a medium for carrying on t sales transactions (i.e.,
online transactions) is known. The popularity of the Internet with
home and business computer users has provided a market opportunity
to provide transaction mechanisms for such Internet users.
Retailers, for example, have launched "online catalogs" via Web
pages as an alternative (or additional) means for selling their
products or services to their customers.
[0006] Recently, online auctions have also gained popularity with
Internet users. For example, web sites such as Ebay.RTM. and
Ubid.RTM. provide conventional auction mechanisms, which allow
sellers and buyers to engage in auction transactions. Current
auctions are defined by a set of participants (sellers and buyers),
a set of legal moves (namely, bidding moves and message exchanging
moves) for the participants, one or more rounds of moves, each
round followed by revelation of information (e.g., current highest
bid, current bidders, highest bidder), and a stopping rule, which
terminates any further bidding moves and clears the auction.
[0007] As noted above, the only legal moves provided by current
auction schemes to participants include bidding moves (bids) and
message exchanging moves. A bid submitted by a bidder for an item
commits the bidder to pay some monetary amount if a given outcome
occurs, the outcome resulting when the bidder is the highest bidder
with a bid amount satisfying the seller's reserve (minimum) bid
amount. Other than bids, the only other legal moves provided to
participants in current auction schemes are message exchanging
moves (i.e., "cheap talk"), which are payoff-irrelevant exchanges
of messages among participants. For example, a bidder may send an
email to the seller inquiring into the description (requesting a
picture, for example) of the item for sale by the seller.
[0008] In general, bids affect the information revelation and the
relevant outcome. On the other hand, message exchanges only affect
information revelation. The current auction schemes, however,
provide the participants with relatively few options and provide an
uninteresting transaction scheme.
[0009] Accordingly, there is a need for an enhanced system and
method for carrying out online transactions and auctions using a
plurality of enhanced auction mechanisms which make available a
plurality of auctions moves and auction schemes, usable together or
separately, to thereby enhance and augment the online auction
process. The present invention satisfies these needs, as well as
others, and generally overcomes the deficiencies found in the
background art.
BRIEF DESCRIPTION OF THE INVENTION
[0010] The present invention is an auction system and method for
online transactions using an enhanced auction mechanism module. The
online auction system comprises an interface module operatively
coupled for communication with a transaction module. A mechanism
module is further coupled for communication with the transaction
module.
[0011] In general, the auction system is embodied in software which
operates and executes within an auction server, or other
conventional data processing means. The auction server is
operatively coupled for communication with at least one client node
via a conventional network connection, such as the Internet.
Participants (sellers and buyers) of the system communicate with
the auction system via one or more of the client nodes using a
conventional client application providing a user-interface, such as
a web browsing application.
[0012] The interface module provides an interface between
participants of the online transaction systems. In particular, the
interface module manages communication requests from the
participants (sellers and bidders) of the system as described more
fully below. Communications for auction transactions received by
the interface module are communicated by the interface module to
the transaction module for further processing.
[0013] The transaction module manages transactions associated with
moves made by the participants of the system, such as when a seller
lists an item for sale, or when a bidder places a bid on an item or
carries out some other auction related transaction.
[0014] The mechanism module defines a plurality of auction rules
which dictate the operation of transactions as carried out by the
transaction module. The present invention provides a mechanism
module with one or more enhanced auction modules. As described more
fully below, the enhanced auction modules extend, augment or
otherwise enhance various auction elements including, for example,
the selection of participants, the grouping of participants, the
moves made by participants, the bidding process of the
participants, the information revelation process, the auction
closing process, and the auction clearing process, among others. In
addition, the enhanced auction modules may be used separately or
together during the auction process.
[0015] The invention further relates to machine readable media on
which are stored embodiments of the present invention. It is
contemplated that any media suitable for retrieving instructions is
within the scope of the present invention. By way of example, such
media may take the form of magnetic, optical, or semiconductor
media. The invention also relates to data structures that contain
embodiments of the present invention, and to the transmission of
data structures containing embodiments of the present
invention.
BRIEF DESCRIPTION OF THE DRAWINGS
[0016] The present invention will be more fully understood by
reference to the following drawings, which are for illustrative
purposes only.
[0017] FIG. 1 is a functional block diagram depicting an
illustrative auction system in accordance with the present
invention.
[0018] FIG. 2 is a functional block diagram depicting an
illustrative mechanism module in accordance with the present
invention.
[0019] FIG. 3 is a logical flow diagram depicting the operations of
a temporal auction process in accordance with the present
invention.
[0020] FIG. 4 is a graph depicting an illustrative relationship
scheme between price and time in descending bid auctions in
accordance with the present invention.
[0021] FIG. 5 is a functional block diagram depicting the states of
items for auction/sale according to interleaving auctions in
accordance with the present invention.
[0022] FIG. 6 is a logical flow diagram depicting the processes of
a sequential bidding auction scheme in accordance with the present
invention.
DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS
[0023] Persons of ordinary skill in the art will realize that the
following description of the present invention is illustrative only
and not in any way limiting. Other embodiments of the invention
will readily suggest themselves to such skilled persons having the
benefit of this disclosure.
[0024] Referring more specifically to the drawings, for
illustrative purposes the present invention is embodied in the
apparatus shown in FIGS. 1, 2, 4 and 5 and the method outlined in
FIGS. 3 and 6. It will be appreciated that the apparatus may vary
as to configuration and as to details of the parts, and that the
method may vary as to details and the order of the steps, without
departing from-the basic concepts as disclosed herein. The
invention is disclosed generally in terms of online auction
systems, although numerous other uses for the invention will
suggest themselves to persons of ordinary skill in the art.
[0025] Referring first to FIG. 1, there is shown a functional block
diagram of an illustrative auction system 10 in accordance with the
present invention. The auction system 10 operates within a network
server 12 which can be any standard data processing means or
computer, including a minicomputer, a microcomputer, a UNIX.RTM.
machine, a mainframe machine, a personal computer (PC) such as an
INTEL.RTM. based processing computer or clone thereof, an
APPLE.RTM. computer or clone thereof, or a SUN.RTM. workstation, or
other appropriate computer.
[0026] Server 12 generally includes conventional computer
components (not shown), such as a motherboard, a central processing
unit (CPU), random access memory (RAM), hard drive, display
adapter, other storage media such as diskette drive, CD-ROM,
flash-ROM, tape drive, PCMCIA cards and/or other removable media, a
monitor, keyboard, mouse and/or other user interface means, a
modem, network interface card (NIC), and/or other conventional
input/output devices. The server 12 has loaded in its RAM a
conventional server operating system (not shown) such as UNIX.RTM.,
WINDOWS.RTM. NT, NOVELL.RTM., SOLARIS.RTM., LINUX or other server
operating system. Server 12 also has loaded in its RAM web server
software (not shown) such as APACHE.RTM., NETSCAPE.RTM., INTERNET
INFORMATION SERVER.TM. (IIS), or other appropriate web server
software loaded for handling HTTP (hypertext transfer protocol) or
Web page requests.
[0027] In accordance with the invention, auction system 10
comprises an interface module 14 operatively coupled for
communication with a transaction module 16, and a mechanism module
18 operatively coupled for communication with the transaction
module 16, each of which are discussed in more detail below. The
auction system 10 is normally embodied in software executed by the
server 12 and carrying out the operations described further below,
although the auction system 10 may alternatively be embodied in
circuitry which carries out the operations described herein by the
auction system 10.
[0028] Server 12 is operatively coupled for communication to at
least one client node 20a, although typically Server 12 will be
coupled to a plurality of nodes (20a through 20n), each operatively
coupled for communication with the auction system, 10, as shown in
FIG. 1. Each client node 20a through 20n, like server 12,
preferably comprises a standard computer such as a minicomputer, a
microcomputer, a UNIX.RTM. machine, mainframe machine, personal
computer (PC) such as an INTEL.RTM., APPLE.RTM., or SUN.RTM. based
processing computer or clone thereof, or other appropriate
computer. Each client node 20a through 20n also includes typical
computer components (not shown), such as a motherboard, central
processing unit (CPU), random access memory (RAM), hard disk drive,
display adapter, other storage media such as diskette drive,
CD-ROM, flash-ROM, tape drive, PCMCIA cards and/or other removable
media, a monitor, keyboard, mouse and/or other user interface
means, a modem, network interface card (NIC), and/or other
conventional input/output devices. Each client node 20a through 20n
also has loaded in its RAM an operating system (not shown) such as
UNIX.RTM., WINDOWS.RTM. 98 or the like. Each client node 20a
through 20n further has loaded in RAM a Web Browser program (not
shown) such as NETSCAPE.RTM., INTERNET EXPLORER.RTM., AOL.RTM., or
like browsing software for client computers.
[0029] Each client node 20a through, 20n is normally embodied in a
conventional desktop or "tower" machine, but can alternatively be
embodied in a portable or "laptop" computer, a handheld personal
digital assistant (PDA), a cellular phone capable of browsing Web
pages, a dumb terminal capable of browsing Web pages, an internet
terminal capable of browsing Web pages such as WEBTV.RTM., other
Web browsing devices.
[0030] Each client node 20a through 20n is networked for
communication with server 12. Typically, a client node is
operatively coupled to communicate with server 12 via the Internet
through a phone connection using a modem and telephone line (not
shown), in a standard fashion. A client node may alternatively be
coupled to server 12 via a network (e.g., LAN, WAN, etc.)
connection. It will be apparent to those skilled in the art having
the benefit of this disclosure that alternative means for
networking clients 20a through 20n and server 12 may also be
utilized, such as a direct point to point connection using modems,
satellite connection, direct port to port connection utilizing
infrared, serial, parallel, USB, FireWire/IEEE-1394, and other
means known in the art. Generally, client nodes 20a through 20n and
server 12 communicate using the TCP/IP (transfer control
protocol/internet protocol). However, other protocols for
communication may also be utilized, including PPTP, NetBEUI over
TCP/IP, voice-based protocols, and other appropriate network
protocols.
[0031] While depicted as a single computer for purposes of
disclosing an exemplary embodiment of the present invention, server
12 may comprise a plurality of servers (i.e., a server farm) to
provide robust services to the client nodes 20a through 20n, as is
known in the art.
[0032] As described above, the auction system 10 comprises an
interface module 14, a transaction module 16 operatively coupled
for communication with the interface module 14, and a mechanism
module 18 operatively coupled for communication with the
transaction module 16. The auction system 10 is further coupled to
a data storage facility or database (DB) 22 wherein data associated
with operation of the auction system 10 is maintained. The DB 22
maintains such information as the participants (buyers and
sellers), the items for sale, the transactions, among other
relevant auction data. Typically such information is maintained by
the DB 22 using a conventional relational table scheme although
other arrangements, such as a b-tree for example, may also be used
for the storage and retrieval of data between the auction system 10
and the DB 22.
[0033] The interface module 14 is operatively coupled for
communication with the client nodes 20a through 20n, normally via a
network connection, such as an Internet connection. The interface
module 14 carries out the operation of managing communications
between the client nodes 20a through 20n and the auction system 10.
For example, the auction system 10 may be configured as a "web" or
"http" application, in which case the interface module 14 manages
http requests from users of the client nodes 20a through 20n.
Accordingly, the interface module 14 provides an interface (e.g.,
command line user interface, graphical user interface, or voice
activated user interface) for auction participants (sellers and
bidders) to engage in online auctions via requests submitted from
the client nodes 20a through 20n to the auction system 10. A
request issued by a participant is communicated to the transaction
module 16 for further processing. The results (outcome) of the
transaction are communicated as a reply to the user via interface
module 14.
[0034] The transaction module 16 processes requests from
participants of the auction system 10, which are communicated to
the transaction module 16 via the interface module 14. For example,
when a seller lists an item for sale with the auction system 10,
the transaction module 16 manages the bids, messages, or other
moves which are carried out by the participants as part of the
auction process. The transaction module 16 also manages such
auction events as the selection of bidders, the beginning and
ending of rounds of moves, the information revelation, and the
clearing of the auctions, for example. As described further below,
the mechanism module 18 defines the rules used by the transaction
module 16 for carrying out its transactions.
[0035] The transaction module 16 is coupled with the DB 22 for
storage and retrieval of auction related data. For example, the DB
22 maintains seller data, buyer or bidder data, auction item data,
transaction (bids, messages, games, etc.) data, and other auction
relevant data. The structure of DB 22 may comprise any suitable
format for data storage and retrieval such as a relational table,
for example.
[0036] The transaction module 16 is operatively coupled for
communication to the mechanism module 18. The mechanism module 18
defines one or more auction rules which dictate the operation of
transactions as carried out by the transaction module 16. The
present invention provides a mechanism module with one or more
enhanced auction modules, each defining rules of auction operation.
In general, the enhanced auction modules extend, augment or
otherwise enhance various auction elements including, for example,
the selection of participants, the grouping of participants, the
moves made by participants, the bidding process of the
participants, the information revelation process, the auction
closing process, and the auction clearing process, among others. In
addition, the enhanced auction modules may be used separately or
together during the auction process to further enhance the auction
environment.
[0037] Referring now to FIG. 2, as well as FIG. 1, there is shown a
functional block of an illustrative mechanism module 18 in
accordance with the present invention. The mechanism module 18
comprises a plurality of enhanced auction modules 30 through 56,
each available for auction use separately or together with one or
more of the other modules 30 through 56. Each of the auction
modules 30 through 56 defines a specific set of rules which dictate
the auction operation process.
[0038] Auction module 30 provides for "second-price" auctions.
According to auction module 30, during the bidding process for an
item for sale, only the second-highest standing bid is revealed to
the seller at each point in time, while the first-highest bid is
kept secret by the auction system 10. At the close of auction for
the item, the item is given to the bidder with the highest standing
bid, and payment is made in the amount of the second-highest bid.
If several ("k") units of the item are auctioned together, then the
"k" highest bidders receive the "k" items, but they only pay the
amount of the "k+1"-th highest bid. More generally, the
second-price module implements the generalized version of the
second-price scheme known as the Vickrey-Clarke-Grove scheme. In
"reverse" auctions, sellers may place "sale" offers (i.e., offers
to sell an item for a given price). In this case, only the
second-lowest price is revealed to the buyer. At the close of
auction, the seller with the lowest standing offer is awarded the
sale, however the buyer pays the. second-lowest price for the item.
This "second-price" arrangement promotes truthful bidding (i.e.,
bidding the full monetary value of the item) and generally
increases the economic efficiency of the transaction.
[0039] Auction module 32 provides for "temporal" auctions.
According to module 32, each bid for an item not only specifies a
monetary amount, but also an expiration event. That is the bid is
valid (i.e., commits the bidder) until the expiration event occurs.
Additionally, the seller may stop the auction at any time, at which
point the item is sold to the bidder with the highest standing bid.
The expiration event may be conditioned on various events,
generally which are outside the control of the bidder. For example,
the expiration event may be a specified date and time. In another
example where several temporal auctions are run in parallel, the
expiration of a bid in one auction can be made contingent on the
outcome in another auction. Once the expiration event occurs, the
bid expires and is no longer "standing". That is, the bidder is not
further committed to purchase the item once the bid has expired.
This arrangement provides the advantage that a bidder may bid on
many similar items (in parallel), but also ensures that the bidder
is only committed to one of the items. Another advantage with
temporal auctions is that the expiration events may be hidden from
the seller, thereby encouraging the seller to close the deal to
prevent standing bids from expiring.
[0040] FIG. 3 depicts a logical flow diagram depicting the
operations of an illustrative temporal auction process in
accordance with the present invention. The auction process starts
(box 100) when an item is listed for sale by a seller (box 110).
After the item is listed for auction, the "rounds of moves" begin
(box 115 through diamond 160).
[0041] During the "rounds of moves" phase of an auction the
participants may engage in various legal "moves" as defined by the
mechanism module (module 32, in this example). FIG. 3 illustrates
such conventional moves as "other moves" (box 115). Box 130 is
carried out after box 115.
[0042] At box 120, in addition to conventional auction moves (e.g.,
message exchange) as noted above for box 115, bidders may place
bids with expiration conditions. Such conditions may be that the
bid expires at a certain date or time. The bidder may also indicate
that the bid is contingent on the outcome of another auction. Other
such conditions may be placed by the buyer. Box 130 is then carried
out.
[0043] At box 130, the auction information may be revealed to the
participants of the auction. Such information may include such data
as, the highest standing bid, the highest standing bidder, for
example. Diamond 140 is then carried out.
[0044] At diamond 140, the transaction module 16 determines whether
the expiration event has occurred for current standing bids. If so,
box 150 is carried out, otherwise diamond 160 is then carried
out.
[0045] At box 150, the expiration condition has occurred for a
standing bid. Accordingly, the bid is now cancelled and no longer
commits the bidder to the transaction. Diamond 160 is then carried
out.
[0046] At diamond 160, the transaction module 16 determines whether
an end of auction event has occurred for the current item for sale.
For example, the item may have a specified time limit which has
expired. Another example of an end of auction event is when the
seller "closes the deal" and ends the auction. When an end of
auction event occurs, the rounds of moves phase completes and box
170 is then carried out to clear the auction. Otherwise, moves
continue with either box 115 or box 120. It is noted that this
process described herein and depicted in FIG. 3 is only exemplary
and other embodiments of the module 32 may be used in accordance
with the invention.
[0047] Referring again to FIG. 2, as well as FIG. 1, auction module
34 provides for "temporal" negotiations. In temporal negotiations,
bidders and sellers submit "bid" and "sell" temporal offers
respectively. Each temporal offer can be made conditioned on some
expiration event, as described above for temporal auctions (module
32). Here, the seller may "close the deal" at any given time, at
which point the item is sold to the bidder with the highest
standing bid. Additionally, the bidder may "close the deal" at any
given time, at which point the item is bought from the seller with
the lowest standing offer. This procedure may lead to significant
efficiency gains, especially in its second-price embodiment (i.e.,
when coupled with the second-price mechanism 30). In fact, it
combines the flexibility of temporal offers (which allow, for
instance, offers to be made for many substitute goods in parallel)
with the efficiency of the second-price scheme (which creates
incentives for truth-revelation on both sides).
[0048] Auction module 36 provides for "descending bid" auctions. In
descending bid auctions, the sale price for an item decreases with
time at a predetermined rate, normally determined by the seller.
FIG. 4 depicts a graphical representation 60 of the relationship
between the bid price and time. The slope 62 represents the auction
price set to an initial value at point 64, which corresponds to
price p0 (70) at time t0 (74). The slope 62 terminates at point 64,
which corresponds to price p1 (72) at time t1(76). As the auction
opens, the price for the item begins at p0 (70) and over time
declines to p1 (72). The p1 (72) price generally corresponds to the
seller's "reserve" price. It will be appreciated that slope 62 is
only exemplary, and that various other (non-linear) slopes may also
be used.
[0049] A bidder may place bids at any time (between t0 (74) and
t1(76)) at the current price, at which point the item is sold at
the current price. For multiple items, the price may continue to
decline until all items are sold or the reserve price is reached.
It is noted that the seller may place a reserve price which is the
lowest amount the seller is willing to sell the item. In such a
case, p1 (72) will be greater than zero (0).
[0050] In a case where this module 36 is combined with the
second-price auction module 30, the first bidder wins the auction
when a second bidder places a second (lower) bid; in this case, the
bidder pays the sale price at which the second bidder bids.
[0051] Referring again to FIG. 2, as well as FIG. 1, auction module
38 provides for aggregated combinatorial auctions. In general, the
module 38 provides a process wherein different auctions, by
different sellers, are aggregated in order to yield a unified
combinatorial auction. According to this module 38, sellers
register their goods until a specified date (Date 1). These goods
are sold together (aggregated) in one big auction which ends on a
second specified date (Date 2). From date 1 to date 2, bidders
submit bids for any of the goods, while specifying when certain
goods are "substitute" and they only wish to obtain a predetermined
amount (e.g., one item). On date 2, the auction closes and the
market is cleared. This scheme provides the advantage of allowing
for bids on combinations of items, even though the items may be put
on sale by different sellers. In turn, the combinatorial bids
provide better deals for buyers who have an interest in acquiring
several items in conjunction.
[0052] Auction module 40 provides for "preference" auctions.
According to preference auctions (module 40), preference auctions
generally involve "sealed" (hidden) bids for substitute goods. In
particular, a bidder, when placing a bid for an item, specifies the
bid price and the preference (priority) value for the item.
Subsequently, when the bidder places additional bids for
"substitute" items, the bidder may specify the price and preference
value for such additional items, thereby creating a ranking
hierarchy for each bid placed.
[0053] At the close of the auction, auction module 40 further
provides an allocation algorithm to close the auction items
according to bid price and ranking. Namely for each item, the
highest bidder wins. However, a bidder may potentially be the
highest bidder in two or more substitute items. In this case, the
allocation algorithm provides that the bidder only wins the highest
rank item. The bids for the lower ranked items are cancelled. Under
this arrangement, the auction module 40 provides for a
substantially more efficient and profitable auction environment
over the prior art auction model. After allocation of the items is
completed, the auction is cleared.
[0054] Auction module 42 provides for enhanced "quantity-based"
auctions. According to module 42, the purchase prices are
determined by the total quantity of items sold. More particularly,
the price for an item is determined not only by the total sales of
that item, but also by the total sales of other related goods. That
is, price for items in the auction can be made functional on the
total quantity sold. For example, once the total number of sales
for video cassette recorders (VCR) have reached a certain
threshold, the price for televisions (TV) drops by a predetermined
amount. As more VCRs are purchased, the price for TVs accordingly
decreases. In this way, the sale price is inversely proportional to
the number of bids received for said goods. According to one
implementation, the seller may provide a table of prices, wherein
the price for each item is specified according to the number of
bids received. During the auction, the sale price for each item for
auction is set according to the number of bids received.
Additionally, bidders may use "proxy" (conditional) bids which
commit the bidder only if a certain condition occurs, such as, if
the price of a bundle drops below a certain threshold.
[0055] Auction module 44 provides for enhanced "bundle-based"
auctions. According to module 44, a "bundle" is sold when the total
revenue for the bundle reaches some predetermined reserve price,
which may be hidden or revealed. Under this scheme, a seller may
list two or more items (i.e., a "bundle") and indicate a reserve
price for the entire bundle. That is, the seller provides a
"shared" reverse price, so that when the bids for the individual
items are added together, if the sum satisfies the "shared" reserve
price, the bundle is then sold. In general, if the "shared" reserve
price is not met, none of the items in the bundle are sold.
[0056] Although not required, the seller may further elect to
provide individual reserve prices for each item in the bundle
individually. In this case, a seller is able to sell those
individual items which satisfy for the item's reserve price, even
though the entire bundle does not satisfy the "shared" reserve
price. The auction scheme provided by module 44 provides an
advantageous means for a seller to liquidate a plurality of
items.
[0057] Auction module 46 provides for "interleaving" auctions. In
interleaving auctions, an item for sale is periodically "featured"
for a predetermined interval of time. After the interval, the item
returns to a "normal" or non-featured state. Should a bidder place
a bid for an item while it is "featured" a discount is associated
with the bid. In the preferred embodiment, the bidder is also
required to show awareness of the fact that the item is currently
featured in order to get the discount. For example, the bidder may
be required to provide a "feature number" associated with the item.
Subsequently, should the bidder win the auction (normally by
placing the highest bid), the bidder receives the discount.
[0058] An item may be featured according to a random event by a
random number generator which selects an item, or an item may be
periodically cycled as a "featured" item according to a
predetermined interval. Interleaving auctions, in general,
encourage potential buyers to monitor the site to determine when an
item they are interested becomes "featured" to thereby obtain a
discounted sale price. Accordingly, an auction site providing the
features of interleaving auctions may generate more traffic (and
thus revenue) over those auction sites without interleaving
auctions.
[0059] FIG. 5 illustrates the cycling process 200 of auction items
according to auction module 46. Items for sale are generally either
in the "normal" state 210, where no rebate is generally provided
for bids received during this state. At periodic intervals, the
items in this pool may be featured (state 220), where a rebate is
provided for bids received during this state. It is noted that
items may be featured in parallel and/or sequentially with other
items in the pool.
[0060] It is further noted that the present "featured item" scheme
differs from conventional "featured item" schemes which simply
highlight an item to draw attention to bidders without providing a
discount or which periodically cycles from "normal" to "feature"
mode.
[0061] Auction module 48 provides for "reverse payment" auctions.
According to module 48, an auction is presented for a plurality of
identical items. If there are "k" number of items, there will be
"k" number of winning bidders. Additionally, the highest bidder
receives a rebate (or discount) to the sale price of the item. In
the preferred embodiment, the rebate amount is such that the
highest bidder will ultimately pay less than the lowest bidder.
Since the highest bidder pays less than the other winners, this
mechanism stimulates competition among bidders to be the highest
bidder. Other rebate amounts may also be used to encourage bidding
competition.
[0062] Module 48 is suitable for use with conventional auctions
where the highest bid amount is disclosed. Alternatively, module 48
may also be configured to disclose only the second highest bid
amount, thereby making competition for the highest bid more
challenging.
[0063] Auction module 50 provides for "conditional" auctions. In
conditional auctions, an external event may be tied to auction
sales, such that the occurrence of an external event outside the
control of the participant may be used to influence the auction
terms (e.g., allocation and payment). For example, the sale price
for an item may be conditioned on stock market prices, or city
temperature, for example. Alternatively, the final allocation of
the item may be subject to the occurrence of an external event. For
example, a predetermined, publicly disclosed condition may be
attached to the item for sale; at the close of the auction, the
highest bidder receives the auctioned item if, and only if, the
external condition is verified.
[0064] Auction module 52 provides for "auctions with
price-warranty". According to module 52, a seller may list an item
for sale with a "price-warranty". In this case, the seller warrants
that if an identical item is sold (auctioned) subsequent to the
present auction for the item at a price lower than the sale price
for the present auction, the buyer will receive a rebate. The
rebate amount is normally the difference in value between the
original sale and the subsequent sale. Normally, the subsequent
safe must fall within a specified time (e.g., thirty days) of the
original auction to qualify for the rebate.
[0065] Auction module 54 provides for "sequential bid" auctions.
According to module 54, the bidding process follows a two-phase
process as depicted in FIG. 6. Process 300 initiates the auction
process for the item, when the item is listed for sale by the
seller. Box 310 follows process 300.
[0066] At box 310 (the rebate request phase), bidders submit or
request a rebate amount (to the sale price) for the item for sale.
According to the scheme of module 54, the rebate amount requested
by each bidder determines the order of in which bids are received
during the second phase (box 320) which is then carried out.
[0067] At box 320 (the bidding placing phase), participants submit
bids in the order given by their requested rebate such that
participant who requested higher rebates bid before participants
who requested lower rebates, In general, participants who bid after
other participants are aware of the previous participant bids. Box
330 is then carried to provide allocation of the sale and clearing
of the auction using conventional allocation and clearing
means.
[0068] This auction scheme enables participants to explore the
spectrum between obtaining information about other bids and
obtaining a user-defined rebate amount on the participants bid,
should the participant win.
[0069] Auction module 56 provides for "tournament" (or "survival")
auctions. According to auction module 56, a plurality of items
(i.e., "n" items) are sequentially auctioned in "n" consecutive
rounds of bidding. At the end of each round of bidding only a
pre-specified number of the highest bidders is allowed to proceed
to the next round, while the remaining bidders are excluded from
participation in the remaining rounds. For example, module 56 may
provide that only a certain number of bidders "survive" to the next
rounds of bidding. Alternatively, module 56 may provide that a
certain number of current bidders are excluded (i.e., do not
"survive") from participation in the next rounds. Other
arrangements for limiting the number of bidding participants for
successive rounds may also be used with this module scheme.
[0070] Additionally, the highest bidder at the end of each round
receives the item offered for sale at that round. In one embodiment
of auction module 56, all bidders pay the amount of their bids at
each round regardless of whether they receive the item or not. This
arrangement allows a bidder to compete strategically for a sequence
of similar or dissimilar items, and provides for a more
entertaining and challenging online transaction environment.
[0071] While modules 30 through 56 of the mechanism module 18 may
be used separately to drive the transaction module 16 in carrying
out its transactions, the modules 30 through 56 may be combined
with one or more of the other modules to provide further
combinations and extensions to the auction environment to the
participants.
[0072] Accordingly, it will be seen that this invention provides an
online auction system which provides a plurality of extensions to
various auction elements. The present auction system provides
additional participant entertainment, efficiency, and profitability
not present in conventional systems. Although the description above
contains many specificities, these should not be construed as
limiting the scope of the invention but as merely providing an
illustration of the presently preferred embodiment of the
invention. Thus the scope of this invention should be determined by
the appended claims and their legal equivalents.
* * * * *