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. has a single configurable parameter¾the “budget,” which is the total amount you are willing to pay for any 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. .
This is the easiest valuation to understand and configure. Use it when you want to purchase the maximum amount of bandwidth possible in each auction round.
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. begins by offering the unit price corresponding to your budget for all the bandwidth available. If your agent finds it will not receive this full 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. because the price it offers is too low, it bids again. The new bid raises the unit price offered and lowers the desired quantity requested so that the out-of-pocket amount remains the same. Of course, other agents may re-bid also when your offer is provisionally accepted but theirs is not. This process continues until all bandwidth is apportioned among all bidders who are willing to pay 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 graph below shows the calculation your agent does in response to rising market prices.
An advantage of the Budget valuation is that your agent always begins by bidding for the full amount of bandwidth the seller is offering, whether it increases or decreases over time. With most of the other valuations, you must specify the maximum quantity you are interested in obtaining and would have to increase this setting to obtain more if the seller offered more.
There are two disadvantages to the Budget valuation: