Auction Graph

The Auction graph indicates the state of the Merkato InvisibleHand's software platform, which dynamically prices, sells, and allocates IP bandwidth in real time. Merkato means "market" in Esperanto. auction in progress, not only for 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. but for all others actively bidding. The Auction graph is shown below:

The graph elements are:

• Y-axis, indicating unit price (the axis scales automatically to show all current bids).
• X-axis, indicating quantity (the axis scales automatically to show available quantity).
• Blue dots, representing the last bids received from all bidders (excluding a bid by your agent, which is shown as a red dot).
• A solid magenta dot, indicating the allocation you received during the previous auction round.
• A red line, representing your agent’s 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. curve, as determined by settings in your active valuation window.
• A blue shaded area, representing the allocation 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. to successful bidders, except for any bandwidth allocated to your agent. This area is a series of blocks, where the height represents the unit price paid and the width represents the quantity allocated. (The bandwidth allocated to your agent is the amount of blue under the red dot and to the left.)

The black area above the blue shaded area represents the level at which you would have to place a bid to outbid a current bidder. Your active valuation curve is visible in relation to other bidders, whether you are bidding or not. This allows you to optimize your valuation curve with respect to the other bidders before you begin actively bidding.

While you are not bidding, the place at which the red curve intersects the top of the blue shaded area indicates the quantity and price of bandwidth you would receive if other bidders placed the bids you can currently observe. Of course, once you start bidding, other bidders will react to your bids and perhaps raise 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. (the blue shaded area) above what it was without you.

The two screens shown below illustrate this happening, as the bidders reacts to your presence in the marketplace. The best way of fending off other bidders and getting exactly the bandwidth you want is to have your curve nearly vertical at the quantity you desire. (Of course, this also means that you are willing to pay a higher unit price for bandwidth as well.)

Clicking on the auction graph changes the scaling from the quantity being offered by the seller to the maximum quantity specified in your valuation. This is useful if your configured maximum is significantly less than the total quantity offered by the seller and you want to “zoom in” on the portion of the graph that is important to you. The unit price axis (Y axis) auto-scales when you change the quantity scale, as shown below.