The seller 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. sets the quantity 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. available in the marketplace and the absolute minimum price at which it will be sold. In 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 what quantity is being sold and the floor price The lowest price the seller will accept for bandwidth. The seller can establish the floor price through the Seller agent..
· “Qty” sets the current quantity for sale in the marketplace. Your agent sells all this bandwidth to the buyers unless the cumulative bandwidth requested by buyers is less than this amount.
· “Value” sets the minimum amount of money you are willing to accept for the entire “Qty” of bandwidth. (Therefore the floor price is this “Value” divided by the total “Qty”.)
Changes to these values take effect at the start of the next auction.
There are two strategies you can use 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.: Static and Dynamic. Use Dynamic Seller strategy unless your administrator advised you to use Static Seller strategy.
Dynamic Seller strategy sets the unit price for all bidders to the unit price of the last unit of bandwidth sold. It creates an artificial bidder designed to always lose at the highest possible price and for the highest possible quantity. After a round of bidding, Merkato’s Progressive Second Price auction mechanism sets the price for the winner to the price offered by the second-place bidder. With the Dynamic Seller strategy, the artificial bidder is always the second place bidder.
(For a complete explanation, see Merkato Auction Mechanism: The Progressive Second Price Auction.)