Your 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. indicates your maximum willingness to pay for various amounts 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.. In the course of an auction, 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. uses this valuation information to determine whether to bid, how much bandwidth to ask for, and how much money to offer, in response to changing market conditions.
You choose a valuation from the Valuation pull-down menu. The selection of valuations you can choose from is determined by the Merkato administrator.
The first item in the menu, Show Only One, controls whether multiple valuation windows can be displayed. If a check mark appears before this control, only one valuation can appear on the desktop.
Each valuation has a Current Valuation radio button at the top of the window. Select the Current button to make a valuation active. (This automatically de-selects whichever valuation had been active.) The green arrow in the menu-bar pull-down list also indicates which valuation is active.
Valuations use different parameters to change their shapes and values, but all result in a representation of valuation and cost for a quantity of bandwidth. The graph to the left of the numerical entry boxes shows two curves; the red curve represents valuation relative to quantity and the yellow curve represents maximum cost relative to quantity. If there appears to be only one curve, both curves may be identical and overlapping.
Valuation, represented by the red curve, means the value buyers put on a resource The bandwidth service that is offered through a single Merkato marketplace. It will have service attributes, an available quantity earmarked for it by the NSP, and a market mechanism for distributing bandwidth (either the 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. or reservation market The Merkato market mechanism by which a specified quantity of bandwidth, for a specific duration, is sold for a firm price specified by the seller and agreed to by the buyer. This is an automated process based on a rate sheet that the seller establishes in advance. ). . The cash value buyers put on a resource depends on its scarcity or availability. Mathematically, valuation it is the area under a curve on a graph (in math terms, the integral) of unit price verses quantity. Merkato uses this curve to determine the actual bids to be placed.
The yellow curve is more valuable for non-economists. On a graph, this curve represents the maximum you would pay per quantity of allocated bandwidth. The amount you actually pay depends on the bid of the second-highest bidder. (See Merkato Auction Mechanism: The Progressive Second Price Auction.)