The “Max Qty” setting in the Budget Valuation The value a buyer or seller places on bandwidth. Setting a valuation is part of setting a purchasing strategy. Valuation settings within a buyer agent let buyers specify the amount they are willing to pay for varying amounts of bandwidth. This information is used by the agent to respond to changing market conditions during a Merkato progressive second price auction. with Limits and the “Qty” settings in the Square Root, Linear, Parabolic, and Logarithmic valuations constrain your agent The program that interacts with the rest of Merkato on behalf of buyers and sellers. Buyers can acquire bandwidth by configuring their agents to offer the price they are willing to pay for a range of available quantity, or use their agent to request a quote for a fixed-price bandwidth reservation. Sellers configure their agents with a quantity of bandwidth for sale and a minimum price they are willing to accept for that quantity. to purchase no more than the quantity entered. Using this parameter to buy only the amount of bandwidth The amount of data transmitted or received per unit of time. When we refer to acquiring or selling bandwidth, we mean the amount of information that can be sent over a connection at one time, at the allowed speed, without packet loss or excessive delay. Bandwidth is measured in bits-per-second. you need lowers your cost for two reasons:
1. Simple mathematics; Once the market price The price for something that buyers and sellers agree on. Merkato establishes a market price for bandwidth during each spot market The Merkato mechanism by which bandwidth is traded, in a progressive second price auction. An optimal fair market price is established and bandwidth is allocated to buyers, based on their bids relative to other buyers. auction round. There is a fixed amount for sale, so as demand increases, prices rise. The market price is reached when the cumulative demand of all the buyers is exactly equal to the amount of bandwidth being offered by the seller. has been established, if you purchase less bandwidth, you will pay less in total cost.
2. Requesting less bandwidth will often lower the market price for everyone. In Merkato, market price is driven by demand. If all bidders begin their bidding by asking for all the bandwidth the seller has available, the market price is driven up as buyers bid and re-bid in an effort to win an allocation An amount of bandwidth available for your use. Depending on the type of service being offered through Merkato, this can represent the maximum bandwidth available to you or a minimum guarantee of bandwidth available to you.. If a bidder initially asks for a small fixed quantity at a high price, however, they essentially “take that bandwidth off the top” and the other bidders will contend for what is left.
Example:
If 5 bidders, each with a budget of $5000, bid for a total of 100 Mbps One of the ways of expressing units of bandwidth-Megabits-per-second (1,000,000 bits-per-second)., each would receive an allocation of 20 Mbps at a market price of $250/Mbps. If one bidder decided that 20 Mbps was too much and used the Budget Valuation with Limits to set a maximum quantity of 15 Mbps, demand would drop. The market price would drop to $235 for everyone. The dropping bidder would pay a total cost of $3,530 for the 15 Mbps (as opposed to $5,000 for 20 Mbps the bidder didn’t really need). Of course, the other bidders would benefit from the market price drop as well. However, their benefit would be in the form of increased allocation rather than decreased cost. They would each receive 21.25 Mbps for their $5,000 budget.