Systems and methods for pricing and selling digital goods
View Patent ↗Systems and methods are provided for pricing, selling, and/or otherwise distributing electronic content using auction mechanisms. A randomized auction mechanism is used to determine both the number of goods that are sold and the selling price. The auction mechanism automatically adapts to the bid distribution to yield revenue that is competitive with that which could be obtained if the vendor were able to determine the optimal fixed price for the goods. In one embodiment a set of bids is randomly or quasi-randomly partitioned into two or more groups. An optimal threshold is determined for each group, and this threshold is then used to select winning bids from one or more of the other groups. In another embodiment, each bid is compared to a competing bid that is randomly or quasi-randomly selected from the set of bids. If the bid is less than the randomly-selected competing bid, the bid is rejected. Otherwise, the bid is accepted and the bidder buys the auctioned item at the price of the randomly-selected bid.
1. A system for vending copies of a digital work, the system including:
a computer system for receiving a plurality of bids from a plurality of bidders, wherein a maximum number of copies of the digital work subject to vending is not specified in advance of receiving the plurality of bids;
a memory for storing the bids;
bid sampling logic for selecting (i) a bid from a bidder, and (ii) a sample of one or more bids from the plurality of bids, wherein the sample does not include the bid from the bidder;
a processor for deriving a threshold from the sample of bids, and for comparing the bid of the bidder with the threshold to determine whether to vend a copy of the digital work to the bidder as a function of the comparison, the threshold chosen to maximize a quantity obtained by multiplying (a) a number of bids in the sample that exceed the threshold by (b) a bid value of a highest bid in the sample that is less than or equal to the threshold; and
a network interface unit for sending a copy of the digital work to the bidder.
2. The system of claim 1 , wherein the system obtains payment from the bidder in an amount equal to the threshold.
3. The system of claim 1 , wherein the sample of bids is selected from the plurality of bids in a random fashion.
4. The system of claim 3 , wherein the system obtains payment from the bidder in an amount equal to the threshold.
5. The system of claim 1 , further including payment processing software that collects payment for the digital work from the bidder.
6. The system of claim 5 , wherein the sample of bids is selected from the plurality of bids in a random fashion.
7. The system of claim 1 , wherein the network interface is operable to send a copy of the digital work to the bidder in a secure manner.
8. The system of claim 1 , wherein the sample comprises a single bid, and wherein the threshold comprises the bid value of the single bid.
9. The system of claim 1 , wherein the sample of bids is selected from the plurality of bids in a random fashion.
10. The system of claim 9 , wherein the system obtains payment from the bidder in an amount equal to the threshold.
11. The system of claim 1 , wherein the processor compares the bid with the threshold in order to determine whether to distribute a copy of the digital work to the bidder.
12. The system of claim 1 , wherein the bid sampling logic is configured to select a new bid and a new sample of one or more bids from the plurality of bids each time a new bid is submitted by a new bidder.
13. The system of claim 12 , wherein each new sample of bids is selected from the plurality of bids in a random fashion.
14. The system of claim 12 , wherein the new sample of bids includes each of the plurality of bids except for the bids included in the previous samples.
15. The system of claim 1 , further including a payment processing component that processes payment information regarding the digital work.
16. The system of claim 15 , wherein the payment processing component is a server.
17. The system of claim 15 , wherein the payment processing component is a program of instructions.
18. The system of claim 17 , wherein the payment from the bidder is equal in amount to the threshold derived from the sample of bids.