Functional Pricing for Computer Internet Market

Abstract

A method and system of conducting sales over the computer internet where the prices of the merchandises are dynamic functions of time instead of static rational numbers. In one embodiment, this method and system is a free market place that's able to conduct single-unit or multiple-unit sales of products and services from multiple sellers. In this market place, negotiation of the price does not require either side to make arbitrary offers, and further, with a large pool of prospect buyers, the true, current market value of the on sale products and services can be automatically reflected and updated through the purchases made.

Description

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a diagram of the preferred embodiment of the system of the present invention dealing with multiple-unit listing.

DETAILED DESCRIPTION

FIG. 1 shows a detailed map of the system of the present invention conducting sales of n units of a hypothetical item, where n is a positive integer no less than 1. U. sub. 1., U. sub. 2., U. sub. k., all the way to U. sub. n. are the said n units of product listed by a seller, where k is an integer between 1 and n. The horizontal axis represents the elapsing time, and the vertical axis represents the price of the product on sale. These said n units are listed with the system at the beginning of the sale, and are set to have different initial point of variation but a same starting price of P. sub. H. Further, they all follow identical paths in the price-time space that are represented by the curves in FIG. 1. These curves demonstrate that as time elapses, the price of each unit reduces according to the function that defines the curves. The following are examples of all possible scenarios that can happen to a prospect buyer of the said hypothetical item.

Scenario 1. As unit 1's price lowers to P. sub. 1, at time T. sub. 1., a prospect buyer, say buyer 1, makes the purchase for this unit.

Scenario 2. A prospect buyer, say buyer 2, places an eventual bit for 1 unit at price P. sub. 2., which is lower than P. sub. 1. However, unit 1 has been bought off at P. sub. 1. and T. sub. 1., and at the same time, unit 2 becomes the leading unit, and when unit 2 reaches P. sub. 2. at time T. sub. 2., the system automatically completes the transaction for buyer 2.

Scenario 3. A prospect buyer, say buyer 3, places an eventual bit for 1 unit at price P. sub. 2., but at the later time than buyer 2's bit. Buyer 3 would not receive unit 2 at T. sub. 2., but would have to wait for the next leading unit to reach P. sub. 2. to become a successful buyer.

Scenario 4. A prospect buyer, say buyer 4, places an eventual bit for 1 or 2 units at price P. sub. k. When unit k becomes the leading unit and reaches P. sub. k. at time T. sub. k., the system completes the transaction for buyer 4 and offers buyer 4 unit k and unit k-plus-1.

Scenario 5. A prospect buyer, say buyer 5, places an eventual bit for 3 units at price P. sub. k., but at the later time than buyer 4's bit. Buyer 5 would not receive unit k, unit k-plus-1, but would have wait for the next leading unit to reach P. sub. k, given that 3 or more units available, to become a successful buyer.

Scenario 6. A prospect buyer, say buyer 6, places an eventual bit for 5 to 7 units at price P. sub. n-minus-2. However, toward the end of the auction, when unit n-minus-2 reaches price P. sub. n-minus-2., there are only 3 units available. Hence buyer 6 would not become a successful buyer.

Scenario 7. A prospect buyer, say buyer 7, places an eventual bit for 2 to 5 units at price P. sub. n-minus-2, at a later time than buyer 6's bit. When unit n-minus-2 reaches price P. sub. n-minus-2., buyer 7 would receive the remaining 3 units, unit n-minus-2, unit n-minus-1 and unit n. at time T sub. n-minus-2., and the whole sale of the said item is then completed.

DEFINITIONS

CONCURRENT PRICE: The price point of a specific unit of an item on sale within the system of the present invention at the time of which a prospect buyer is viewing the said unit.

EVENTUAL BID: An offer to purchase a certain quantity range of an item that's on sale within the system of the present invention, not at the concurrent price, but rather, at a lower and later price-time point.

CHRONICLE PRIORITY PRINCIPLE: The rule which the system of the present invention stands by and follows, that when allocating available units of an item which received two or more qualifying bids at the same price point, the system would execute and fulfill bids one by one in the chronicle order of which these bids were registered with the system.

INITIAL POINT OF VARIATION: The time point where a unit of an item that's on sale within the system of the present invention starts to change its concurrent price by following the predetermined function of time.

Claims

1. A method of selling products and services over the internet comprising the steps of: a seller setting a time-dependent price function, typically a mathematically well-defined decreasing function, when listing a product or service for sale or listing two or more units of the same product or service for sale;the seller listing the multiple units of the product or service for sale by setting a time interval in between each unit's initial point of price variation and the seller sets the time interval substantially concurrently with the seller setting the time-dependent price function: andwherein a buyer makes an instant purchase of the product or service or one or more of the units of the product or service at a concurrent price when the said buyer feels the price is acceptable.

2. The method in claim 1, wherein the seller lists the two or more units of the same product or service at the same starting price.

3. The method in claim 2, wherein the seller lists the multiple units by setting an equal a time interval in between each unit's initial point of price variation.

4. The method in claim 1, wherein a buyer can make a bid for the said product or service for a later and lower price-time point, and when the price function reaches the said point, the system automatically completes the transaction, given that the said products or services remain available.

5. The method of claim 1, wherein a buyer can make a bid for the two or more units of the same product or service for sale according to the price function of the first listed unit; the system automatically completes the transaction, given that the desired amount of said goods or services is still available.

6. A method of selling products and services over the internet comprising: setting a time-dependent decreasing price function for listing of two or more units of the same product or service for sale to potential buyers;listing each of the two or more units for sale to potential buyers at different start times by setting a substantially equal time interval in between each unit's initial point of price variation prior to the listing of the first of the two or more units of the same product or service for sale;initially listing the two or more units of the same product or service at the same starting price and the two or more units are subject to the same time-dependent decreasing time function; andwherein a buyer can make a bid for the product or service of the two or more units for a later and lower price-time point, and when the time-dependent price function of one of the two or more units reaches the price-time point, the sale to the buyer is transacted provided that the product or service remains available.