To illustrate how buy-back agents work, consider a case where the seller has a floor price of $100 per Mbps for the first 25 Mbps of bandwidth released to the market, and is willing to release three more 25 Mbps blocks of bandwidth if the price reaches $125, $150, and $175 respectively. This would be accomplished with the following seller/inelastic valuation settings for the Seller agent and three buy-back agents:
|
|
Seller Agent |
Buy-back Agent 1 |
Buy-back Agent 2 |
Buy-back Agent 3 |
|
Max Quantity Setting |
100 Mbps |
25 Mbps |
25 Mbps |
25 Mbps |
|
Max Value Setting |
$10,000 |
$3,125 |
$3,750 |
$4,375 |
|
Resulting unit price |
$100 per Mbps |
$125 per Mbps |
$150 per Mbps |
$175 per Mbps |