Merkato many features that are controlled by desktop agents, and, in the case of 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., take effect at the beginning of the next auction. These include the following:
(1) Quantity available in the spot market (set via 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.)
(2) Price floor in the spot market (set via the seller valuation)
(3) Quantity available in 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. (controlled via a buy-back reservation 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. controlled by the seller)
Items (1) and (2) are described fully in the seller valuation section of this manual. (See “Seller Valuation” on page 22.)
Item (3) is the reservation equivalent of a spot market buy-back agent. For example, suppose a seller has a maximum of 300 Mbps One of the ways of expressing units of bandwidth-Megabits-per-second (1,000,000 bits-per-second). and would like to sell them on the reservation market. Currently the seller wants to release only 100 Mbps. The seller could do so by using a reservation agent to reserve the additional 200 Mbps. Any time the seller wishes to release additional 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 the reservation market, the seller cancels the reservation. If required, the seller can use multiple reservation agents to release bandwidth to the market more gradually, depending on market conditions.