Besides setting the seller’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. and strategy, which you configure, there are parameters for the Spot auction that the Merkato administrator configures.
The Merkato administrator sets the following parameters:
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. bought at spot auction is allocated until the next auction ends. You can specify the length of time between auctions. The duration of the auction itself is not affected.
The administrator sets the total bandwidth your network is capable of sending. This is the maximum quantity you can offer for sale in the combined Spot and Reservation markets.
The bandwidth you want to sell can be apportioned between the Spot and Reservation markets. How you apportion it determines the amount available for reservations and the amount sale in the spot market The Merkato mechanism by which bandwidth is traded, in a progressive second price auction. An optimal fair market price The price for something that buyers and sellers agree on. Merkato establishes a market price for bandwidth during each spot market 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. is established and bandwidth is allocated to buyers, based on their bids relative to other buyers. . You can have the administrator implement only the Spot market or only the 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. .
Buyers specify how they value bandwidth by entering price and quantity in fields in the valuation window. There are a variety of methods of Buyer valuation, but your administrator configures which are available to each buyer.
For a complete description of Buyer valuations, see Merkato Buyer Reference Manual, “Valuations Overview.”
Buyer valuations include:
Traffic Based Bidding works with any of the types of valuation listed below. If Traffic Based Bidding is enabled for a valuation, a separate tab appears in that valuation’s window, as shown below.
If a buyer uses the Traffic-based tab in a valuation window, the Buyer 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. changes the maximum quantity in its valuation by checking the usage at intervals.
The agent places the same value on all units of bandwidth offered for auction, based on a total budget.
The agent places the same value on all units of bandwidth offered for auction, based on a total budget. Buyers set the minimum and maximum bandwidth for which they will bid.
Bidding is at a constant unit price regardless of the quantity. This is similar to a take-it-or-leave-it bid. Buyers may get less quantity than they ask for, but the unit price will never exceed what they offer.
Similar to budget valuation except buyers lower the total cost they are willing to pay as bandwidth decreases.
Buyers can use this valuation if they wish to bid aggressively at a mid-point in the quantity range and less aggressively for higher or lower amounts. The agent using this valuation bids most aggressively at 37% of the maximum quantity specified.
Buyers can use this valuation if they wish to bid aggressively at a mid-point in the quantity range and less aggressively for higher or lower amounts. The agent using this valuation bids most aggressively at 50% of the maximum quantity specified.
Reservation pricing is set using a table configured in the 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 or reservation market). agent. Only your Merkato administrator can make changes to this table. The reservation price table looks like this:
The following values are configurable:
In general, sellers offer the highest price for short reservations and for small quantities of bandwidth. They offer the lowest price for large quantities of bandwidth over long periods of time.
When a buyer requests a reservation, Merkato calculates a price based on the requested amount of bandwidth and the duration of the reservation. The reservation prices are automatically scaled between price points to prevent abrupt jumps when buyers select quantities just above or below the price point.
Your Merkato administrator can increase the number of rows or columns in the rate sheet to accommodate more price points.
In addition to the unit price for bandwidth, you may specify a cancellation fee. This fee is expressed as a percentage. It represents the percentage of the value of the cancelled portion of the contract that is charged to the buyer. For example, if the cancellation fee is 50% and the buyer cancels at the mid point of the contract, the buyer owes 50% of the original contract price (the remaining portion of the contract) times 50% (the cancellation fee), or 25% of the original contract, on cancellation. Buyers are informed of this fee in a pop-up confirmation window when they cancel an existing reservation.