WO2001080058A2

WO2001080058A2 - A negotiation protocol using a third-party information escrow

Info

Publication number: WO2001080058A2
Application number: PCT/US2001/012081
Authority: WO
Inventors: Roy S. Ophir; Barry Nalebuff; Gideon Parchamovsky; Brad Zelnick; Dylan Christensen; William Kun
Original assignee: Ophir Roy S; Barry Nalebuff; Gideon Parchamovsky; Brad Zelnick; Dylan Christensen; William Kun
Priority date: 2000-04-13
Filing date: 2001-04-12
Publication date: 2001-10-25
Also published as: AU2001253452A1

Description

A NEGOTIATION PROTOCOL USING A THIRD-PARTY INFORMATION ESCROW

BACKGROUND OF THE INVENTION 1. Field of the Invention

This invention relates generally to negotiation methods and systems and specifically to methods and systems for a negotiation protocol using a third-party information escrow.

2. Description of the Related Art Every business transaction assumes that two or more entities control resources that may be traded so that all parties will benefit, i the simplest case, without regard to parameters such as, for example, quantity, financing and delivery options, a buyer and a seller engage each other for the purpose of trading goods for currency. The buyer wants to pay as little as possible for the goods and the seller wants to earn as much as possible from the sale of the goods. To achieve these respective goals, each party may negotiate in an attempt to influence the other's opinion of the value of the goods. In certain markets, little negotiation is required. For example, in a robust market, such as a commodities exchange, which is a market characterized by many substitute products coexisting with frequent opportunities to liquidate inventory, market efficiencies primarily dictate the value of the goods while the behavior of individual parties secondarily dictates the value of the goods. In most markets, however, additional negotiation is required. For example, in thin markets, which are markets characterized by unique products subject to few opportunities to liquidate inventory, market inefficiencies require trading parties to gauge a variety of factors to determine the value of the goods. A variety of negotiation protocols have been used to facilitate commercial transactions between buyers and sellers. Buyers and sellers of unique goods may always choose to negotiate one-on-one. However, the strategic posturing used in negotiation is time-consuming and costly. Negotiation may require the scheduling of discussions and the additional commitment of resources and capital before the outcome can be accurately predicted. In addition, the stress of negotiation frequently causes emotional responses from the parties that negatively or adversely affect their business judgment. Finally, the breakdown of negotiations may negatively impact other business activities'. These and other limitations have been sought to be addressed by various negotiation protocols known in the art.

A menu price negotiation protocol is used by, for example, many stores, online and offline catalogs and restaurants. In this protocol, the seller offers goods for sale at set prices. A buyer who wishes to purchase the goods does not reveal information about the price at which the buyer is willing to purchase the goods, because the information is not relevant in this protocol. The buyer must pay the set price if he wishes to purchase the goods. The transaction strike price, that is, the price at which the goods are sold, is the set price, or the negotiation fails and no transaction occurs. The success of the protocol in terms of achieving the best outcome for both the seller and the buyer depends on the seller's ability to predict each buyer's willingness-to-pay price, that is, the price that each buyer is willing to pay for the goods. Knowing that they are likely to fail at this prediction, sellers will set a menu price that is higher than the seller's willingness-to-sell price, that is, the price at which the seller is willing to sell the goods. By doing so, the seller foregoes income in almost all cases where the price the buyer is willing to pay is greater than the price at which the seller is willing to sell. That is, sellers forego income when buyers are willing to pay prices greater than the price at which the seller is willing to sell, but lower than the menu price, because buyers will walk away from the transaction empty-handed. Similarly, sellers forego income when buyers are willing to pay prices higher than the menu price, because the buyer was willing to pay more. The menu price negotiation protocol therefore fails to achieve the best outcome for both the seller and the buyer. While the outcome of the negotiation is determined expediently, and eliminates factors such as emotional responses and to some extent negative business impact, the lack of efficiency of the protocol in arriving at the best outcome for the transaction severely impacts the buyer and the seller, and the market in general.

In a reverse menu price negotiation protocol, the buyer offers to purchase goods at a set price. A seller who wishes to sell the goods does not reveal information about the price at which the seller is willing to sell the goods, because the information is not relevant in this protocol. The seller must sell at the stated price if he wishes to sell the goods to the buyer. The transaction strike price is the buyer-stated price, or the negotiation fails and no transaction occurs. The success of the protocol in terms of achieving the best outcome for both the seller and the buyer depends on the buyer's ability to predict each seller's willingness-to-sell price. Therefore, the outcomes for the buyer in this protocol are similar to the outcomes for the seller in the menu price negotiation protocol.

In addition, the widespread use of distributed networks, and specifically the ability to inexpensively exchange information using the Internet, has enabled some companies to use a reverse menu price negotiation protocol to act as the middleman in transactions between businesses and consumers. That is, the companies capitalize on the difference between the price at which the seller is willing to sell and the price that the buyer states in his offer. Even though the transaction strike price is the buyer's offer price, such companies take that difference as revenue, a practice which when known to prospective buyers and sellers, causes sellers to artificially inflate the price at which they are willing to sell, and causes buyers to artificially reduce the price stated in their offers. Therefore, this use of the reverse menu price protocol fails to achieve the best outcome for both the seller and the buyer. The outcome of the process is determined expediently, but the lack of efficiency causes loss to the buyers and the sellers, and the market in general.

Auction negotiation protocols purport to obtain a better outcome for both the seller and the buyer, but sacrifice transaction expediency and increase the negative impact of a host of other factors. Auctions are used to create a market event. By setting a time and place where a significant amount of a particular good will be sold, auctioneers facilitate market clearing. Auctions therefore require pre-specified rules of engagement, which are generally market-specific, and in some cases item-specific. These rules of engagement include pre-set beginning and ending times, whereby the auction ends at a specified time. In addition, auction rules dictate that the highest bid over the seller's reserve price at the time the auction is set to close wins. These rules solve certain negotiation problems while failing to address others.

Auction rules help to determine the price at which the bidders are willing to purchase the goods. The open competition, time pressure and possibility of obtaining a low purchase price does little to address the possibility of emotional responses of the sellers and bidders, but induces bidders to reveal through the bidding process the price they are willing to pay for the goods. The use of a hidden reserve price allows the seller to set and reveal to the auctioneer the lowest price at which the seller is willing to sell the goods, without revealing this price to the bidders. This ensures that the seller will realize revenues in an amount equal to the reserve price or higher if buyers who attend the auction are willing to support the reserve price. However, the disclosure of prices, even to only the auctioneer, may have other commercial consequences for the sellers and bidders, whether or not the goods are sold. The auctioneer may be in a position to influence the future participation of bidders and sellers based on the reserve prices or bid prices received. The seller may have more of the same type of goods to sell, but may desire to adjust the reserve price depending on fluctuating market conditions. The lowest price at which the seller is willing to sell may be lower than the reserve price reported to the auctioneer because the seller does not wish to reveal confidential infoπnation related to the seller's cost to obtain or manufacture the goods. Similarly, the bidder may attempt to shade his bid price because he wants to gauge the willingness of other bidders to pay before revealing his own willingness to pay. The bidder is able to engage in this posturing because the ending time of the auction is set, and specifically because the auction rules allow the bidder to submit as many bids as possible before the end of the specified time period. Some auction protocols use anonymity features to protect the identities of the bidders and/or sellers. Other protocols that use anonymity features are contained in articles such as Anonymous Communications and Anonymous Cash (Daniel R. Simon, 1986), Untraceable Electronic Mail, Return Addresses, and Digital Pseudonyms (David L. Chaum, 1981), and A Mix-Mediated Anonymity Service and Its Payment (Elke Franz, Computer Security, 1998). These articles generally concern methods for trading messages via insecure electronic media, such as the Internet or telephone wires, in a fashion that makes the content incomprehensible to anyone other than intended addressees. The described systems encrypt the content of a message by employing a combination of data-mixing techniques with numeric transformations. The systems rely on a third-party database of information that identifies users without divulging the algorithm by which a particular message will be decrypted. Some of these articles concern methods for maintaining the integrity of digital currency. The methods disclosed in these articles provide an increased ability for people to communicate anonymously. However, the ability to communicate anonymously during a negotiation does not alone achieve an optimal result for both buyer and seller.

Other protocols that use anonymity features seek to facilitate the transfer of tradable commodities. For example, the article A Secure Electronic Market for Anonymous Transferable Emission Permits (Markus Gerhardt, System Sciences, 1998) deals with the allocation of tradable emission permits. This article describes a system whereby original permitees may publicize their ownership of a particular quantity of emission rights permits that they wish to make available for sale at a specified price. The system requires that buyers are not identifiable to sellers. The purpose of the method is to efficiently allocate supply and demand of emissions permits when disincentives to disclose a firm's willingness to trade the permits exist in the marketplace. Firms do not want to admit how much they are polluting and they also do not want to admit that they are willing to trade their emissions permits. While this method provides a benefit by using a trusted third party to maintain anonymity between the buyer and the seller, it fails to be effective as a means for negotiating a transaction. The article defines no negotiation module, hi fact, the article states that negotiation between the buyer and the seller is not the subject of the article. The article assumes that a contract between the buyer and the seller already exists.

Anonymity features in combination with other auction features actually decrease the ability of auction protocols to provide a financially optimal result. That is, under the protection of anonymity, certain sellers may bid on their own products in order to cause legitimate bidders to increase their bid prices. For these and other reasons, conventional auction rules fail to provide a financially optimal result in many cases. Sellers are encouraged to provide a reserve price that does not accurately reflect the price at which the seller is willing to sell the goods. Bidders are encouraged to provide a bid price that does not accurately reflect the price at which the bidder is willing to purchase the goods. Therefore, inefficient financial outcomes similar to the negative outcomes discussed above with regard to menu price protocols and reverse menu price protocols are frequent. Electronic versions of Dutch auction negotiation protocols are described by the articles Design of an Internet-Based System for Remote Dutch Auctions (Todd E. Rockoff, 1995), Distributed Auction Bidding System (Michel Banatre, 1981) and The Design and Building ofEnchere, A Distributed Electronic Marketing System (Jean-Pierre Banatre, et al., 1986). In these systems, time is standardized for all prospective buyers and displayed via electronic media so as to ensure opportunistic fairness among the various bidders who may reside in geographically disparate locations at the time of the bidding. These systems employ a psychological sense of urgency, such that the first bidder who tenders an offer that exceeds the reserve price wins the auction. However, as with other auction protocols, these systems require a specified time period for the auction. A short fixed time window is pre-selected by the auctioneer and that is the only time that a particular item is made available for sale via the system. If no successful bids are tendered within the time allotted for a particular item, the item is not cleared from the market. Further, as with other auction protocols, sellers' reserve prices are known to the auctioneer, who may be impartial, and bidders are able to see other bidders' bid prices before placing their own bids. Therefore, for the reasons discussed above with regard to auction protocols generally, these systems encourage sellers and bidders to provide inaccurate reserve prices and bid prices. The inaccuracy of the reserve prices is further compromised in the system disclosed in the Rockoff article, in which the reserve price at any given moment is determined by the clock that moves at a rate controlled by a human auctioneer.

Other auction protocols are described in the articles Multi-Round Anonymous Auction Protocols (Hiroaki Kikuchi, April 1999) and The Design and Implementation of a Secure Auction Service (Matthew K. Franklin, 1995). These articles describe processes for executing automatic sealed bid auctions. Methodologies for setting tie-breakers, as defined by the respective system, are also disclosed. In addition, these articles discuss requirements for conducting online auctions. Items available for sale via the disclosed systems are not cleared from the market at the moment that a bid price exceeds the reserve price. Instead, all participants have an equal opportunity to tender a bid in a given time window, allowing individual bidders to proceed to the next around, if they satisfy certain gaming criteria. The items for sale are cleared only when one bidder remains. In addition, the systems pre-suppose a market containing a large number of players. The systems are predicated on the practicality of specifying a fixed time window for the collection of bids from numerous interested buyers.

The specified time period of auction negotiation protocols has negative consequences for both the sellers and the bidders. As a general matter, this feature causes any negotiation result, whether financially optimal or not, to be determined in a less than expedient time frame. Therefore, similar to one-on-one negotiations, auctions require the commitment of resources and capital for some period of time before the outcome can be accurately predicted, and increase the possibility of a negative impact on other business activities. By pledging to auction their goods, sellers forego other possible offers during the specified time period. Similarly, bidders are required to commit funds for the specified period of time without knowing whether their offers will be successful. The allocation of the capital required for executing the transaction cannot be determined until the conclusion of the auction. Funds are tied up even when the bidder loses. Other opportunities to purchase merchandise with those funds may not exist by the time the auction terminates. Therefore, the bidder may forego several of such opportunities by choosing to bid and losing, hi addition, the time that an auction is scheduled to conclude may conflict with other commitments of the bidder. The ability to leave a phantom bid with the auctioneer is an option for alleviating this inconvenience. However, the bidder is not protected against competitors who submit bids at the last minute.

Therefore, there is a need to provide a negotiation protocol that facilitates market clearing with greater efficiency with respect to obtaining an optimal result for both the buyer and the seller, and specifically a negotiation protocol that obtains an optimal result for both the buyer and the seller by reducing incentives to artificially adjust reserve prices and bid prices. There is also a need to provide a negotiation protocol that facilitates market clearing with greater efficiency with respect to reducing negotiation and transaction costs, and specifically a negotiation protocol that reduces negotiation and transaction costs by expediently providing a result. There is also a need to provide a negotiation protocol that facilitates market clearing with greater efficiency with respect to reducing the possibility of emotional responses. There is also a need to provide a negotiation protocol that facilitates market clearing with greater efficiency with respect to reducing the negative impact on other business activities if negotiations fail.

SUMMARY OF THE INVENTION

The present invention provides methods and systems for a negotiation protocol using a third-party information escrow. The present invention provides greater market clearing efficiency by establishing an expedient final offer arbitration environment in which bidders and offerors are motivated to provide bid value infoπnation and reserve value information which accurately represent the respective values each places on the subject of the negotiation (hereinafter referred to as the "negotiation subject"). In a preferred embodiment, a secure application server (hereinafter referred to as "SAS") receives offeror identification information (hereinafter referred to as "OH"), negotiation subject identification information (hereinafter refeπed to as "NSII"), bidder identification information (hereinafter refeπed to as "BII"), reserve value information (hereinafter refeπed to as "RVI") and bid value information (hereinafter referred to as "BVI"), for a desired negotiation subject. This information is preferably provided using secure transmission protocols such as, for example, secure HTTP protocols and secure transmission protocols that use symmetric and asymmetric encryption, authentication and digital signature algorithms and corresponding keys. Such protocols ensure that the information remains uncompromised and/or remains unknown until it is received by the SAS, and enable the determination of the identities of the transmitter and the receiver of the information.

In one embodiment, an offeror uses an offeror interface to provide Oil and NSII to a merchandising application server (hereinafter referred to as "MAS"), which stores the information in a merchandising database for later viewing by prospective bidders. The MAS then creates an offeror message packet (hereinafter referred to as "OMP") containing the MAS's identification and authentication information, the Oil and the NSII, and encrypts this OMP. The MAS then affixes a time stamp to the OMP and digitally signs the OMP using a digital signature provided by the SAS or by another trusted authority. The MAS then transmits this encrypted, time stamped and digitally signed OMP to the offeror interface. The offeror then provides RVI for the negotiation subject described by the NSII, and transmits this RVI, along with the OMP, to the SAS, which has the key to decrypt the OMP. hi this manner, the SAS, and only the SAS, receives the RVI, and the SAS receives the same Oil and NSII that is contained in the merchandising database. The use of the encrypted OMP prevents the Oil and NSII from being compromised during the transmission from the MAS to the SAS through the offeror interface, and ensures that the SAS processes the OMP only after positively authenticating the MAS as the transmitter of the OMP. The SAS stores the Oil, NSII and RVI in an escrow database. The BII and the BVI are received by the SAS in a similar manner. A prospective bidder browses NSII, including the specific NSII provided by the offeror, in the merchandising database until a desired negotiation subject is located. In this example, the desired negotiation subject is the negotiation subject described by the NSII provided by the offeror. The prospective bidder then uses a bidder interface to provide BII to the MAS, along with a request to submit BVI for the desired negotiation subject. The MAS then creates a bidder message packet (hereinafter referred to as "BMP") containing the MAS's identification and authentication information, the Oil and NSII associated with the desired negotiation subject, as well as the BII, and encrypts this BMP. The MAS then affixes a time stamp to the BMP and digitally signs the OMP using a digital signature provided by the SAS or by another trusted authority. The MAS then transmits this encrypted, time stamped, and digitally signed BMP to the bidder interface. The bidder then provides BVI for the desired negotiation subject, and transmits this BVI, along with the BMP, to the SAS, which has the key to decrypt the BMP. In this manner, the SAS, and only the SAS, receives the BVI, and the SAS receives the same Oil, NSII and BII that is contained in the merchandising database. The use of the encrypted BMP prevents the Oil, NSII and BII from being compromised during the transmission from the MAS to the SAS through the bidder interface, and ensures that the SAS processes the BMP only after positively authenticating the MAS as the transmitter of the BMP. The SAS stores the Oil, NSII, BII and BVI in the escrow database. The SAS then matches the Oil and NSII from the OMP to the Oil and NSII from the BMP to determine which RVI in the escrow database should be compared to the BVI received with the BMP. hi this manner, the SAS receives Oil, NSII, BII, RVI and BVI, for a desired negotiation subject. After receiving and matching the applicable Oil, NSII, BII, RVI and BVI for the desired negotiation subject, the SAS applies result determination rules to the information first to determine if features of the bidder and features of the offeror should prevent the bidder and/or the offeror from participating in the transaction. After determining if the parties are allowed to participate, the SAS applies result value determination rules of the result determination rules to determine a result value for the transaction, such as a transaction strike price. The result determination rules can be tailored to specific industries and/or market applications.

For example, in many industries, the credit limit of the bidder in light of other information may prevent a bidder from participating in a transaction. In some embodiments tailored to such industries, the BVI would comprise the credit limit of the bidder and a willingness-to-pay price. The SAS would apply result determination rules to determine if the willingness-to-pay price is greater than the credit limit, or if the willingness-to-pay price is greater than the credit limit when combined with any cuπent payment obligations the bidder has already incurred. Alternatively, in other embodiments, the credit limit may be compared with a transaction strike price that is determined according to result value determination rules, such as strike price determination rules. In such embodiments, the bidder and offeror are permitted to participate in the transaction, but the negotiation fails if the determined transaction strike price is greater than the credit limit of the bidder, or if the transaction strike price is greater than the credit limit when combined with other payment obligations the bidder may have. As another example, in certain industries, known conflicts between the bidder and offeror, related or unrelated to the specific negotiation subject, may prevent a transaction. In embodiments tailored to such industries, for example, the RVI would comprise offeror conflict information and the BVI would comprise bidder conflict information, and the SAS would apply result determination rules to the offeror conflict information and bidder conflict information to determine if such conflicts exist, and then prevent a transaction between the parties if necessary.

The features of the bidder and the offeror may be contained in the Oil, NSII, BII, RVI and/or BVI, but may also be contained in other information transmitted to and/or stored in the escrow database. In addition, features of the bidder and offeror may be determined using such information. For example, two or more pieces of information provided in such information may be analyzed by the SAS and used by the SAS to determine additional information that may be used by the SAS when applying the result determination rules. In some embodiments, historical information stored in the escrow database is used when applying the result determination rules. For example, in some embodiments, historical information stored in the escrow database is compared with the Oil, NSII, BII, RVI and/or BVI received for the negotiation. As described below, such historical information can include any penalties assessed against the bidder after a successful or an unsuccessful negotiation, whereby the SAS determines if the bidder has complied with the terms of the penalty before permitting the bidder to participate in the transaction, and/or whereby the SAS uses such historical information when applying result value determination rules. If the offeror and bidder are permitted to participate in the transaction, the SAS applies result value determination rules, such as strike price determination rules, to determine a result value for the transaction, such as a transaction strike price, or to end the negotiation without determining a result value. The result value determination rules determine a result value using the BVI and RVI. For example, a bid value may be determined according to formulas or rules that take into account, for example, the quantity of items that comprise the negotiation subject, the quality of the negotiation subject, the outcome desired by the bidder, the willingness-to-pay price of the bidder, the desired delivery time of the bidder, the delivery risks of the bidder and the risk tolerance of the bidder. Similarly, a reserve value may be determined according to formulas or rules that take into account, for example, the quantity of items that comprise the negotiation subject, the quality of the negotiation subject, the outcome desired by the offeror, the willingness-to-sell price of the offeror, desired delivery time of the offeror, the delivery risks of the offeror and the risk tolerance of the offeror. Alternatively, in a salary negotiation, one or more of the bid value and the reserve value may be determined according to formulas or rules that take into account, for example, employment history, academic credentials, personality traits, the commercial status of the company, benefits packages and the location of the office. Alternatively, in a litigation, one or more of the bid value and the reserve value may be determined according to formulas or rules that take into account, for example, the cost of the litigation, tolerance to a prolonged schedule, other means of redress, the ability to absorb litigation costs and the desire to avoid publicity. In this manner, the bid value determination and the reserve value determination can be tailored to account for specific industry and/or market characteristics.

If the bid value determined using the BVI is less than the reserve value determined using the RVI, the SAS ends the negotiation without determining a result value for the transaction.

If the bid value determined using the BVI is greater than or equal to the reserve value determined using the RVI, the SAS applies additional result value determination rules to determine a result value for the transaction. In some embodiments, these additional result value determination rules determine a result value that is equal to the reserve value. In other embodiments, they determine a result value that is equal to the bid value. In other embodiments, they determine a result value between the reserve value and the bid value. In some embodiments, the result value determination rules comprise an algorithm. In some of such embodiments, the BVI comprises a willingness-to-pay price, and the RVI comprises a willingness-to-sell price. In some of those embodiments, the algorithm determines a result value, that is, a transaction strike price, that is the algebraic mean between the willingness-to-pay price and the willingness-to-sell price. In other of those embodiments, the algorithm is a randomizer that determines a random transaction strike price falling between the willingness-to-pay price and the willingness- to-sell price, h other of those embodiments, the algorithm determines a transaction strike price that is equal to the willingness-to-pay price, hi other of those embodiments, the algorithm determines a transaction strike price that is equal to the willingness-to-sell price. In some embodiments, the result value determination rules determine that a plaintiff should prevail on all counts. In other embodiments, the result value determination rules determine that a defendant should prevail on all accounts. In other embodiments, the result value determination rules determine that a plaintiff should prevail on some counts but not others. In other embodiments, the result value determination rules determine that a defendant should prevail on some counts but not others.

In this manner, the set of result value determination rules can be tailored to account for specific features of an industry and/or market, or specific features of one or more users of the system. If the SAS applies the result value determination rules and determines a result value for the transaction, the negotiation is successful and the offeror and the bidder, and in some embodiments other users of the system, are informed of the success of the negotiation and the result value. Information required to conduct the transaction at the result value is then transmitted to the applicable parties. If the SAS applies the result value determination rules and ends the negotiation without determining a result value for the transaction, the negotiation is unsuccessful and the bidder, and in some embodiments other users of the system, are informed of the failure of the negotiation.

Whether the negotiation is successful or unsuccessful, the SAS may impose one or more penalties against the bidder. As stated above, any assessed penalty becomes a feature of the bidder to which the result determination rules are applied during subsequent BVI submissions by the bidder. In each embodiment, the penalty is tailored to the specific industry and/or market to which the embodiment is directed. For example, in some of such embodiments, the penalty may require the bidder to wait until a predetermined time or interval of time before attempting to bid on the desired negotiation subject. In such embodiments, the SAS, in applying the result determination rales, will determine if the bidder has bidding privileges when he submits the BVI.

The system can be tailored to specific industry and/or market needs to prevent the offeror from knowing that a transaction is being or has been attempted. The system can also be tailored to prevent disclosure of the identities of the bidder and the offeror until a negotiation is successful. If the negotiation fails due to the application of the result determination rales, the bidder, and in some embodiments, one or more other users of the system, will be notified of the failure. In some embodiments, it may also be necessary to inform the bidder and/or other users of the system as to the reason for the failure. In some embodiments, the bidder or offeror may be given the opportunity to remedy one or more of the features preventing his participation in the transaction, and in some embodiments, the bidder or offeror may then be allowed to participate in the transaction after the correction has taken place. For example, the bidder could be permitted to obtain additional credit if his credit limit caused the negotiation to fail. In some embodiments, such opportunities can be provided on an anonymous basis, so that only the prevented party would know about the need to^" remedy the feature. In some embodiments, depending on the specific industry and/or market requirements, one or more other users of the system would be notified that the correction was needed or was taking place, hi this manner, the present invention can be tailored to a variety of industry and/or market applications.

The application of the result determination rales, including the result value determination rales, is expedient, limited only by the processing speed of the SAS. That is, once the bidder submits the BVI, the processing begins and the bidder is informed of the result of the negotiation automatically. The expediency of the result reduces negotiation and transaction costs. Unlike in a conventional auction negotiation protocol, offerors liquidate negotiation subjects immediately after a qualifying bidder submits a bid having a value greater than the reserve value. There is no requirement to wait a preset period of time. Similarly, the bidder's capital is not tied up because the bidder knows expediently and automatically whether or not the negotiation is successful. Therefore, neither party foregoes other opportunities during the negotiation process. In addition, because the expediency of the result reduces negotiation and transaction costs, the expediency of the result also reduces the negative impact on other business activities if negotiations fail. There is no risk to other business activities if the result of the negotiation is obtained as soon as it is commercially possible under market conditions.

The anonymity features of the present invention also reduce the negative impact on other business activities if negotiations fail. These anonymity features include the fact that the offeror in the prefened embodiment is unaware that a transaction is being attempted, the fact that the offeror and the bidder in the prefened embodiment are unaware of one another's identity, and the fact that in the prefened embodiment the identities of the offeror and the bidder are not known to other users or third parties, hi many transactions, the fact that two parties attempted a prior transaction but failed is a factor that may weigh against one or both of the parties, if the identity of the parties are known to one another, and/or are known to other users or third parties.

The anonymity features of the system, combined with the expediency of the result, reduce the possibility of negative or adverse emotional responses. The anonymity and expediency jointly remove the need, and the ability, for the offeror and the bidder to engage in presenting offers and counteroffers, a process which is time consuming and capital consuming, and which may breed negative or adverse emotional responses, especially if the identities of the parties are known to one another.

The anonymity and expediency features also reduce the incentives for offerors and bidders to artificially adjust RVI and BVI, for example, by shading a willingness-to- pay price. The anonymity and expediency jointly prevent the cunent bidder from assessing the BVI submitted by other bidders, and from submitting inaccurate or hedged BVI in an attempt to see if it will be accepted before submitting accurate BVI. More specifically, unlike in an auction negotiation protocol, previous BVI submitted by other bidders is not shown to the cunent bidder, and there is no extended time period for the negotiation event. As stated above, the disclosed BVI and set duration as well as the ending time of an auction allows bidders to adjust BVI after assessing the BVI submitted by other bidders. They further allow bidders to submit inaccurate or hedged BVI in the hope of seeing if such BVI will be accepted and then submitting accurate BVI only if necessary.

The ability of the present invention to cause bidders to provide accurate BVI first is enhanced by the penalty assessment feature of the present invention. In each embodiment, the penalty assessed is tailored to the specific industry and/or market for which the embodiment is directed. In some embodiments, if a bid value is rejected for being lower than the reserve value, the bidder is assessed a penalty that is damaging to his business and/or other interest. For example, the bidder may be prevented from submitting another bid until a specified time that is related to the specific type of goods for which the bid was submitted. The bidder is unwilling to artificially adjust his BVI for fear of missing out on a later bidding opportunity. By causing the offeror and bidder to provide accurate RVI and BVI, respectively, the present invention arrives at an optimal result for the transaction, considering the specific industry and/or market to which the present invention is tailored. For some transactions, the optimal result may be to end the negotiation, because one or more of the parties cannot comply with the result determination rules, or because the bid value is not higher than the reserve value. For other transactions, in which the BVI comprises a willingness-to-pay price and the RVI comprises a willingness-to-sell price, the optimal result may be to determine a transaction strike price that is equal to one of the willingness-to-pay price and the willingness-to-sell price. For other transactions, in which the BVI comprises a willingness-to-pay price and the RVI comprises a willingness-to-sell price, the optimal result may be to detennine a transaction strike price falling between the willingness-to-pay price and the willingness- to-sell price, such as, for example, the algebraic mean between the prices, or a random transaction strike price between the prices. Additionally, the anonymity and expediency features reduce the incentive for offerors to artificially adjust RVI because an offeror who submits RVI representing a reserve value which is higher than a reserve value that will be borne by the market will be unable to clear his goods from the market in a time frame which is commercially acceptable for his business and/or other interest. While some bidders may submit BVI representing a bid value high enough to be accepted by the system in such a case, it will be uncommon enough that such offerors will submit future RVI that accurately represents the offeror's true valuation of the goods in order to clear the goods from the market within an commercially acceptable time frame. The anonymity features of the system prevent offerors from tailoring RVI to specific bidders, and prevent bidders from tailoring BVI to specific offerors. In addition, unlike the anonymity features of auction negotiation protocols, where offerors under the guise of anonymity are able to cause bidders to artificially adjust their BVI, offerors in the negotiation protocol of the present invention are unable to influence the BVI because the first bid value which is greater than the reserve value and which is submitted by a qualifying bidder will be accepted. Thus, the same features of the system which cause bidders to submit accurate BVI first will cause offerors to submit accurate RVI, and the outcome is a negotiation protocol which provides an optimal result for each transaction.

BRIEF DESCRIPTION OF THE DRAWINGS

Figure 1 illustrates a distributed network according to an embodiment of the system of the present invention.

Figure 2 illustrates a method according to an embodiment of the present invention whereby an SAS receives Oil, NSII and RVI.

Figure 3 illustrates a method according to an embodiment of the present invention whereby an SAS receives Oil, NSII, BII and BVI.

Figure 4 illustrates an embodiment of the present invention showing the matching of received information by an SAS. Figure 5 illustrates an embodiment of the present invention showing the application of result determination rales by an SAS.

Figure 6 illustrates an embodiment of the present invention showing the application of result determination rules, and specifically result value determination rales, by an SAS.

DETAILED DESCRIPTION OF THE INVENTION

The present invention provides greater market clearing efficiency by establishing an expedient final offer arbitration environment in which bidders and offerors are motivated to provide BVI and RVI, respectively, which accurately represent the respective values they place on the negotiation subject. 1. Architecture

Figure 1 illustrates a distributed network according to a prefened embodiment of the system of the present invention. An escrow controller, refened to as an SAS 100, is in communication with a first database, refened to as an escrow database 110. The escrow controller is a neutral and disinterested party to the negotiation. The escrow controller is not under the control of the offeror, the bidder, any MAS, or any other user of the system, and has no biased financial interest in the transaction toward the offeror, the bidder and any MAS, or any other user of the system. The escrow controller is preferably non-human. An offeror interface 120 and a bidder interface 130 are in communication with the SAS 100. The offeror interface 120 and the bidder interface 130 also are in communication with a merchandising controller, refened to as an MAS 140, which is in communication with a second database, refened to as a merchandising database 150.

The nodes of the distributed network, that is, the offeror interface 120, the bidder interface 130, the MAS 140 and the SAS 100, are connected via an Internet connection using a public switched telephone network, such as those provided by a local or regional telephone company. It should be understood, however, that one or more of the nodes may in other embodiments be connected via dedicated data lines, or cellular, Personal Communication Systems, microwave, satellite or other wired or wireless networks.

Each of the offeror interface 120 and the bidder interface 130 comprises a personal computer having an input device, such as a keyboard, mouse, or conventional voice recognition software package; a display device such as a video monitor; a processing device such as a CPU; memory such as RAM and ROM; a data storage device such as a hard drive; and a network interface such as a modem. The personal computers use web browser software which is preferably capable of using secure HTTP protocols and which can be used to transmit and receive information as described below. One or more of the offeror interface 120 and the bidder interface 130 may alternatively or additionally comprise wired or wireless telephones, cellular phones, satellite phones, personal digital assistants, fax machines, pagers, and other interfaces which are able to communicate according to communication protocols including the protocols used by any of the communication connections listed above with regard to the connections among the nodes of the distributed network.

The MAS 140 is a conventional computer workstation with sufficient memory and processing capability, which operates as a web application server capable of transmitting and receiving information via TCP/IP and related transmission protocols. The MAS 140 must be capable of high volume transaction processing to perform a significant number of mathematical calculations in processing communications and searching databases. The MAS 140 must also be capable of cryptographic processing to support the authentication of communications from offeror interfaces 120 and bidder interfaces 130. In the same manner, the MAS 140 supports the encryption and decryption of information by symmetric and asymmetric algorithms, along with associated keys required for the secure exchange of data and encryption keys.

The SAS 100 is also a conventional computer workstation having capabilities similar to the capabilities discussed with reference to the MAS 140. The SAS 100 is capable of performing a high volume of mathematical calculations in communications processing, database searching and cryptographic processing. Therefore, the SAS 100 supports the authentication of communications from offeror interfaces 120 and bidder interfaces 130. In the same manner, the SAS 100 supports the encryption and decryption of infoπnation by encryption algorithms and associated keys. The SAS further supports authentication of a plurality of MAS ' s 140, through the use of digital signature mechanisms which indelibly enforce and record the authenticity and non-repudiation of each transmitted message packet along with the precise time and date at which the respective message packet was transmitted by each MAS 140 and or received by the SAS 100. The escrow database 110 and the merchandising database 150 may comprise data storage devices such as hard disk magnetic storage units, optical storage units, CD-ROM drives, flash memory, or other storage media known in the art. In the prefened embodiment, database management software is used to create and manage the escrow database 110 and the merchandising database 150. As described below, the merchandising database 150 stores Oil 160, NSII 170 and BII 180 and the escrow database 110 stores Oil 160, NSII 170, BII 180, RVI 185 and BVI 190. The escrow database 110, the merchandising database 150 and any other databases used by one or more of the nodes may facilitate, as needed, cryptographic functions, including the storage of symmetric and asymmetric keys that are used by cryptographic processors to enable the cryptographic processing of information.

While Figure 1 in conjunction with the above description illustrates a single computer acting as the MAS 140 and a single computer acting as the SAS 100, the functionality can be distributed over a plurality of computers or other processing devices. In other embodiments, one or more of the MAS 140 and the SAS 100 is configured in a distributed architecture, wherein databases and processors are housed in separate units or locations. Some of such units or locations perform the primary processing functions and contain, at a minimum, RAM, ROM and a CPU. Each can be attached to an interface device which facilitates communication with the other units or locations through any medium capable of exchanging data between two or more digital devices. The interface device may have minimal processing capability itself, serving primarily as a communications router. An almost unlimited number of units or locations may be supported. 2. Method

Further with regard to Figure 1, Oil 160 and NSII 170 are passed between the offeror interface 120 and the MAS 140, as well as between the offeror interface 120 and the SAS 100, as well as between the SAS 100 and the escrow database 110. Similarly, BII 180 is passed between the bidder interface 130 and the MAS 140, as well as between the bidder interface 130 and the SAS 100, as well as between the SAS 100 and the escrow database 110. In some transmissions, the information is encrypted before being transmitted. RVI 185 is passed between the offeror interface 120 and the SAS 100, as well as between the SAS 100 and the escrow database 110; BVI 190 is passed between the bidder interface 130 and the SAS 100, as well as between the SAS 100 and the escrow database 110.

Figure 2 illustrates a method whereby the SAS 100 receives Oil 160, NSII 170 and RVI 185. In Step 200, an offeror, through the offeror interface 120, securely transmits Oil 160 and NSII 170 to the MAS 140, which in Step 202 stores the Oil 160 and the NSII 170 in the merchandising database 150. Upon receipt of the Oil 160 and the NSII 170, the MAS 140 in Step 204 encrypts the Oil 160 and the NSII 170 by creating an OMP, which is an encrypted version of the combined Oil 160 and NSII 170, and in Step 206 securely transmits the OMP to the offeror interface 120. The offeror interface 120 does not have a key for decrypting the OMP. Therefore, neither the offeror, nor any third party intercepting the transmission is able to compromise the Oil 160 and the NSII 170.

In Step 210, the MAS 140 transmits to the offeror interface 120 a request to provide RVI 185. The request to provide the RVI 185 comprises an HTML-based RVI form, which the offeror may complete to establish the RVI 185 for the negotiation subject identified by the NSII 170. In Step 214, the offeror securely transmits the RVI 185 to the SAS 100, along with the OMP. The SAS 100 has a key that will decrypt the OMP, and therefore in Step 220, the SAS 100 is able to decrypt the OMP, and in Step 224 to store the Oil 160, the NSII 170 and the RVI 185 in the escrow database 110. In this manner, the SAS 100 receives the Oil 160 and the NSII 170 from the MAS 140 through the offeror interface 120, and receives the RVI 185 directly from the offeror interface 120. The RVI 185 is not transmitted to the MAS 140; nor is it transmitted to bidders or to other offerors. The escrow database 110 is maintained in a secure environment accessible only by the SAS 100. It should be understood that such a secure environment can be established by one or more security mechanisms that prevent access to information and processes by unauthorized persons. Information can be securely stored in the escrow database 110 by the SAS 100, thereby preventing unauthorized access by offerors, bidders, any MAS 140 or any other users of the system or other users, as necessary to practice the method of the present invention.

Figure 3 illustrates a method whereby the SAS 100 receives Oil 160, NSII 170, BII 180 and BVI 190. In Step 300, a prospective bidder, through the bidder interface 130, transmits to the MAS 140 one or more requests to receive information regarding the negotiation subjects that are available for bidding, hereinafter refened to as available negotiation subject information. The available negotiation subject information includes at least a portion of the NSII 170 received by the MAS 140 from the offeror interface 120 in Step 200 of Figure 2.

In response to the requests, the MAS 140 in Step 304 transmits available negotiation subject information to the bidder interface 130. This interaction between the prospective bidder and the MAS 140 is accomplished as the prospective bidder transmits the requests by accessing hyperlinks on web pages of a web site maintained by the MAS 140, and the MAS 140 conespondingly transmits to the bidder interface 130 web pages containing the available negotiation subject information. In this manner, the prospective bidder is able to "browse" the available negotiation subject information. Once the prospective bidder receives available negotiation subject information that describes a negotiation subject on which the bidder wishes to bid, hereinafter refened to as a desired negotiation subject, the prospective bidder in Step 310, through the bidder interface 130, transmits to the MAS 140 a request to bid on the desired negotiation subject. For example, the prospective bidder clicks on a hyperlink associated with the available negotiation subject information that describes the desired negotiation subject. In this example, the desired negotiation subject is the negotiation subject identified by the NSII 170 received by the MAS 140 from the offeror interface 120 in Step 200 of Figure 2. Upon receiving the request, the MAS 140 in Step 314 transmits to the bidder interface 130 a request to provide BII 180. In response to this request, the bidder in Step 320, through the bidder interface 130, securely transmits BII 180 to the MAS 140, which in Step 322 stores the BII 180 in the merchandising database 150. Upon receipt of the BII 180, the MAS 140 in Step 324 encrypts the BII 180 along with the Oil 160 and the NSII 170 associated with the desired negotiation subject by creating a BMP, which is an encrypted version of the combined Oil 160, NSII 170 and BII 180, and in Step 326 securely transmits the BMP to the bidder interface 130. The bidder interface 130 does not have a key for decrypting the BMP. Therefore, neither the bidder, nor any third party intercepting the transmission is able to compromise the Oil 160, NSII 170 or BII 180. In Step 330, the MAS 140 transmits to the bidder interface 130 a request to provide BVI 190. In this embodiment, the request to provide the BVI 190 comprises an HTML-based BVI form, which the bidder may complete to establish the BVI 190 for the desired negotiation subject. In Step 334, the bidder securely transmits the BVI 190 to the SAS 100, along with the BMP. The SAS 100 has a key for decrypting the BMP, and therefore in Step 340, the SAS 100 is able to decrypt the BMP, and in Step 344 to store the Oil 160, the NSII 170, the BII 180 and the BVI 190 in the escrow database 110. In this manner, the SAS 100 receives the Oil 160, the NSII 170 and the BII 180 from the MAS 140 through the bidder interface 130, and receives the BVI 190 directly from the bidder interface 130. The BVI 190 is not transmitted to the MAS 140, to offerors or to other bidders. As stated above, the escrow database 110 is maintained in a secure environment accessible only by the SAS 100.

As shown in Figure 4, after the SAS 100 has received the Oil 160 and the NSIT 170 via the OMP, with the RVI 185, and the Oil 160, the NSII 170 and the BII 180 via the BMP, with the BVI 190, and has stored the infonnation in the escrow database 110, the SAS 100 in Step 400 is able to access the escrow database 110 and match the Oil 160 and the NSII 170 received with the RVI 185, to the Oil 160 and the NSII 170 received with the BVI 190, to determine which RVI 185 in the escrow database 110 pertains to the desired negotiation subject being cunently negotiated. Once this determination is made, the SAS 100 is able to conduct the negotiation as described below.

In order to conduct the negotiation according to an embodiment of the present invention, the SAS 100 must apply one or more result detennination rales, including result value determination rules, if applicable, to one or more of the Oil 160, NSII 170, BII 180, RVI 185, BVI 190 and other information, as described below, stored in the escrow database 110. As illustrated in Figure 5, in some embodiments, the SAS 100 in Steps 500 through 524 applies result determination rales to determine if the parties should be permitted to participate in the transaction. This determination may be based on features of the bidder, features of the offeror, features of the desired negotiation subject, or other features of the transaction. In some embodiments, the features compared in the determination are tailored to specific industries and/or markets. In some embodiments, the features may be contained in the Oil 160, NSII 170, BII 180, RVI 185 and/or BVI 190. In other embodiments, the features may be contained in the escrow database 110 with reference to any or all of the Oil 160, NSII 170, BII 180, RVI 185 and/or BVI 190. That is, as described in more detail below, the escrow database 110 in some embodiments maintains historical information or other information that the SAS 100 uses when applying certain result determination rales. Features which the SAS 100 may use to determine if the parties should be permitted to participate in the transaction may include, for example, a time value associated with the BVI 190, refened to as a bid time value, and/or a time value associated with the bidder (for example, contained in the BII 180), refened to as a bidder time value. That is, in some embodiments, the BVI 190 comprises a bid time value representing the time the BVI 190 was transmitted from the bidder interface 130. This can be accomplished by digitally time stamping the BVI 190 when it is transmitted. In other embodiments, the BII 180 comprises one or more bidder time values representing one or more times at which or during which the bidder is permitted or not permitted to submit bids. In other embodiments, one or more of the bid time value and the bidder time value may be contained in other infoπnation received by or determined by the SAS 100. During application of the result determination rales, the SAS 100 compares one or more of the bid time value and the bidder time value to one or more time values that dictate when a bidder may or may not be permitted to submit a bid, refened to as rale time values. As an example of the use of the bid time value and/or the bidder time value to determine if the parties should be permitted to participate in the transaction, the SAS 100 in Step 502 compares the bid time value and/or the bidder time value, as applicable, to one or more rule time values. In some embodiments, a rale time value represents a time before which, or alternatively after which, bidders having certain features, as disclosed or determined from other information received by the SAS 100, are not permitted to bid. In other embodiments, a plurality of rale time values collectively represent windows of time wherein certain bidders are not permitted, or alternatively are permitted, to bid. The rale time values may be determined based on the industry and/or market to which the embodiment is tailored. For example, some embodiments will prevent bidders with low credit ratings from bidding during times other than normal business hours, so that during other hours, the credit rating of the bidders may be checked. As another example, some embodiments will grant prefened bidding times to a certain group of bidders and grant non-prefened bidding times to another group of bidders.

The rale time values also may be equivalent to, or determined according to, a penalty that has been assessed against the bidder, the terms of which have been updated to historical bidding practice information which is checked by the SAS 100 during application of the result determination rales, as described more fully below. If the SAS 100 determines that the bid time value and/or the bidder time value, as applicable, does not represent a time during which the bidder is permitted to submit a bid, the SAS 100 in Step 520 will end the negotiation.

Features that the SAS 100 may use to determine if the parties should be permitted to participate in the transaction may also include, for example, a geographic value associated with a bidder (for example, contained in the BII 180), refened to as a bidder geographic value. That is, in some embodiments, the BII 180 comprises one or more bidder geographic values representing the citizenship, residence, location and/or principal place of business of the bidder. In other embodiments, the bidder geographic value may be contained in other information received by or determined by the SAS 100. During application of the result detennination rales, the SAS 100 compares the bidder geographic value to one or more geographic values that dictate which bidders may or may not be permitted to submit a bid, refened to as rale geographic values. As an example of the use of the bidder geographic value to determine if the parties should be permitted to participate in the transaction, the SAS 100 in Step 503 compares the bidder geographic value, as applicable, to one or more rule geographic values, hi some embodiments, the rale geographic value represents a restricted, or alternatively a pennitted, citizenship, residence, location and/or principal place of business. That is, in such embodiments, bidders having the restricted or permitted citizenship, residence, location and/or principal place of business are not permitted or are permitted, respectively, to bid.

The rale geographic values may be determined based on the industry and/or market to which the embodiment is tailored. For example, some embodiments will prevent bidders of a certain citizenship, residence, location and/or principal place of business from bidding during certain times. As another example, some embodiments will prevent bidders of a certain citizenship, residence, location and/or principal place of business from bidding on negotiation subjects offered for negotiation by an offeror having a certain citizenship, residence, location and/or principal place of business. The rule geographic values also may be equivalent to, or determined according to, a penalty that has been assessed against the bidder, the terms of which have been updated to historical bidding practice information that is checked by the SAS 100 during the application of the result determination rales, as described more fully below. If the SAS 100 determines that the bidder geographic value will not permit the bidder to submit a bid, the SAS 100 in Step 520 will end the negotiation.

Features that the SAS 100 may use to determine if the parties should be permitted to participate in the transaction may also include, for example, the credit limit of the bidder. That is, in one embodiment, the BVI 190 comprises a willingness-to-pay price of the bidder as well as a credit limit of the bidder. Alternatively, the BVI 190 could comprise a willingness-to-pay price of the bidder and information such as a tax identification number or social security number that can be used by the SAS 100 to determine the credit limit of the bidder, hi still other embodiments, features such as the credit limit of the bidder may also be included in, for example, the BII 180. As an example of the use of the credit limit of the bidder to determine if the parties should be permitted to participate in the transaction, the SAS 100 in Step 504 compares the credit limit of the bidder to the willingness-to-pay price. If the SAS 100 determines that the willingness-to-pay price is higher than the bidder's credit limit, the SAS 100 in Step 520 will end the negotiation.

Similarly, in some embodiments, the escrow database 110 maintains historical information regarding prior payment obligations of the bidder. Therefore, the SAS 100 is able to determine whether the bidder has met such payment obligations, and if the SAS 100 determines that the willingness-to-pay price is lower than the bidder's credit limit, but the bidder has an outstanding obligation to make a payment for a negotiation subject on which he previously submitted a willingness-to-pay price, and this obligation in combination with the cunent willingness-to-pay price would exceed the credit limit, the SAS 100 in Step 520 will end the negotiation. Alternatively, in some embodiments, before ending the negotiation, the SAS 100 may provide the bidder with the opportunity to obtain additional credit, through any interface and method, including those accessible to the bidder via the SAS 100 and/or the MAS 140. In such embodiments, once the bidder has obtained additional credit, the SAS 100 may continue the negotiation. If the SAS 100 ends the negotiation in Step 520 because the bidder lacked sufficient credit, the SAS 100 in Step 522 stores the result of the negotiation in the escrow database 110.

Features that the SAS 100 may use to determine if the parties should be permitted to participate in the transaction may also include, for example, any penalties assessed against the bidder. As an example, the SAS 100 in Step 510 accesses the escrow database 110 to analyze historical bidding practice infonnation previously stored in the escrow database 110 with reference to the BII 180. The historical bidding practice information is a record of prior BVI 190 submitted by the bidder, and may also include, for example, which offerors and negotiation subjects were associated with such prior BVI 190 and whether the negotiations associated with such prior BVI 190 were successful or unsuccessful. In some embodiments, analysis of the historical bidding practice infonnation is necessary to determine if, according to the result determination rales enforced by the SAS 100, the bidder should be permitted to bid on the specific desired negotiation subject. For example, in certain embodiments, as described below, the bidder is penalized for submitting BVI 190 comprising a willingness-to-pay price for a desired negotiation subject that is lower than the willingness-to-sell price contained in the RVI 185. In some embodiments, the penalty requires that the bidder wait until a pre-determined time before attempting to place another bid on the desired negotiation subject. In such embodiments, the historical bidding practice information will contain a record of the terms of the penalty assessed against the bidder, and the SAS 100 is able to analyze the historical bidding practice information to determine if the bidder has complied with the terms of the penalty before placing the cunent bid. If the SAS 100 determines that the bidder should not be permitted to bid on the desired negotiation subject due to non-compliance with the terms of a previously assessed penalty, the SAS 100 in Step 520 ends the negotiation and in Step 522 stores the result of the negotiation in the escrow database 110.

Features that the SAS 100 may use to determine if the parties should be permitted to participate in the transaction may also include, for example, known conflicts between the bidder and the offeror. As an example, the RVI 185 and the BVI 190 may comprise information, such as offeror conflict information and bidder conflict information, respectively, that can be compared to determine if there is a conflict between the bidder and the offeror. In such embodiments, the SAS 100 in Step 514 accesses the escrow database 110 to analyze the RVI 185 and the BVI 190 to determine if any such conflict exists. Such offeror conflict information may comprise, for example, the geographic location of the offeror; the involvement of the offeror in legal proceedings; the involvement of the offeror in political conflicts; the principal place of business of the offeror; and/or the identity of a legal representative (such as the name of a law firm), accounting representative (such as the name of an accounting firm) firm or other professional service representative retained by the offeror. Similarly, such bidder conflict information may comprise, for example, the geographic location of the bidder; the involvement of the bidder in legal proceedings; the involvement of the bidder in political conflicts; the principal place of business of the bidder; and/or the identity of a legal representative (such as the name of a law firm), accounting representative (such as the name of an accounting firm) or other professional service representative retained by the bidder. If the SAS 100 determines that the bidder should not be permitted to bid on the desired negotiation subject due to known conflicts between the offeror and the bidder, the SAS 100 in Step 520 ends the negotiation and in Step 522 stores the result of the negotiation in the escrow database 110.

If the SAS 100 detennines that the parties should not be permitted to participate in the transaction, the SAS 100 in Step 524 transmits to the bidder interface 130 a notification that the negotiation failed. In some embodiments, depending on market and/or industry requirements, the bidder may be informed of the reason for the failure. In other embodiments, also depending on market and/or industry requirements, one or more of the offeror, the MAS 140 and a third party may also be informed of the failure of the negotiation and or the reason for the failure. Once these notifications have taken place, the SAS 100 in Step 604 may assess one or more penalties against the bidder, depending on the reason for the failure of the negotiation. The method of the present invention then continues from Step 604 as described more fully below.

As illustrated in Figure 6, if the SAS 100 determines that the parties should be permitted to participate in the transaction, the SAS 100 in Steps 600 through 634 will apply result value determination rales of the result determination rules to further conduct the negotiation. In Step 602 the SAS 100 compares the BVI 190 with the RVI 185. For example, the SAS 100 processes the BVI 190 to determine a bid value, and processes the RVI 185 to determine a reserve value. If the SAS 100 determines that the bid value is less than the reserve value, the SAS 100 in Step 620 ends the negotiation, and stores the result of the negotiation in the escrow database 110. The escrow database 110 then in Step 622 transmits to the bidder interface 130 a notification that the negotiation failed. In some embodiments, depending on market and/or industry requirements, the bidder may be informed of the reason for the failure. In other embodiments, also depending on market and/or industry requirements, one or more of the offeror, the MAS 140 and a third party may also be informed of the failure of the negotiation and/or the reason for the failure. The method of the present invention then continues with Step 604, if applicable, as described below. If, however, the SAS 100 determines that the bid value is less than or equal to the reserve value, the SAS 100 in Step 624 applies additional result value determination rales of the result detennination rules to determine a result value for the transaction. In some embodiments, these additional result value determination rales determine a result value that is equal to the reserve value. In other embodiments, they determine a result value that is equal to the bid value. In other embodiments, they determine a result value between the reserve value and the bid value. In some embodiments, these additional result value determination rales comprise an algorithm. In some of such embodiments, the BVI 190 comprises a willingness-to-pay price and the RVI 185 comprises a willingness-to-sell price. In some of those embodiments, the algorithm determines a result value, that is, a transaction strike price, that is the algebraic mean between the willingness-to-pay price and the willingness-to-sell price. In other of those embodiments, the algorithm is a randomizer that randomly determines a transaction strike price falling between the willingness-to-pay price and the willingness-to-sell price. In other of those embodiments, the algorithm determines a transaction strike price that is equal to the willingness-to-pay price. In other of those embodiments, the algorithm determines a transaction strike price that is equal to the willingness-to-sell price.

The result value determination rales can be tailored to account for specific features of an industry and/or market. Once the result value is determined, the SAS 100 in Step 630 ends the negotiation and stores the result value in the escrow database 110 with reference to the applicable Oil 160, NSII 170 and BII 180. The SAS 100 then in Step 634 transmits to the bidder interface 130, the offeror interface 120 and any applicable MAS 140 (depending on the embodiment) a notification message. The message indicates that the negotiation was successful and reports the result value. In some embodiments, depending on market and/or industry requirements, only the MAS 140 will be notified by the SAS 100. The MAS 140 will in turn notify the bidder interface 130 and the offeror interface 120. Once the MAS 140 has received notification that the negotiation was successful, the MAS 140 removes the NSII 170 from the available negotiation subject information that may be viewed by subsequent prospective bidders.

Once the SAS 100 has ended^' a negotiation, whether the negotiation successful (a transaction results) or unsuccessful (no transaction results), the SAS 100 in Step 604 may assess one or more penalties against the bidder. For example, some penalties may be applied when the negotiation fails due to the application of certain result determination rales, but not when the negotiation fails due to the application of other result determination rules. In each embodiment of the present invention, the penalties are designed to induce the bidder to submit BVI 190 that accurately represents the value of the desired negotiation subject to the bidder. Certain penalties are designed to induce the bidder to submit BVI 190 comprising a willingness-to-pay price that is equal to the highest price the bidder is willing to pay for the desired negotiation subject. The features which so induce the bidder also induce the offeror to submit RVI 185 that accurately represents the value of the desired negotiation subject to the offeror, or more specifically for one example, induce the offeror to submit RVI 185 comprising a willingness-to-sell price that is equal to the lowest price at which the offeror is willing to sell the desired negotiation subject.

It is important to note that some penalties are applied when a negotiation is successful, some penalties are applied when a negotiation is unsuccessful, and other penalties are applied regardless of whether the negotiation is successful or unsuccessful. The penalties, and the assessment of the penalties, may be tailored to specific industries and/or markets and to specific groups of offerors and/or bidders.

Examples of penalties that may be assessed include a time penalty, whereby bidders are prevented from submitting BVI 190 on a particular negotiation subject at a specific time or during a specific time interval. Different bidders may have different time penalties assessed against them on a particular negotiation subject at a specific time or during a specific time interval. Unsuccessful bidders are prevented from submitting BVI 190 on a desired negotiation subject at a specific time or during a specific time interval. If, for example, multiple units of inventory are available, successful bidders may also be prevented from submitting BVI 190 on additional inventory units at a specific time or during a specific time interval. However, in some embodiments, the specific time or time interval, as applicable, may be different for successful bidders than for unsuccessful bidders. When assessing this penalty, the SAS 100 determines one or more penalty time values. For example, in embodiments in which the BVI 190 comprises a bid time value, and the SAS 100 detennines that a penalty time often minutes should be assessed, the SAS 100 will set a penalty time value that represents a specific time that is ten minutes later than the bid time value. As another example, in embodiments in which the BVI 190 comprises a bid time value, and the SAS 100 determines that a penalty time of 12:00 GMT should be assessed, the SAS 100 will set a penalty time value that represents 12:00 GMT. As another example, in embodiments in which the BII 180 comprises a bidder time value, and the SAS 100 determines that a penalty time interval of 9:00 GMT to 11 :00 GMT should be assessed, the SAS 100 will set a penalty time value that represents the time interval between 9:00 GMT and 11 :00 GMT.

Examples also include, as stated above, a geographic penalty, whereby bidders are prevented from submitting BVI 190 on a particular negotiation subject from specific locations or if the bidders have a specific citizenship, residence, location and/or principal place of business. In some embodiments, the geographic penalty may be different for successful bidders than for unsuccessful bidders. When assessing this penalty, the SAS 100 determines one or more penalty geographic values. For example, in embodiments in which the BII 180 comprises a bidder geographic value, and the SAS 100 determines that a penalty should be assessed because the BII 180 indicates that the bidder is an Australian citizen, the SAS 100 will set a penalty geographic value that represents Australian citizenship.

Examples also include a penalty premium value associated with the reserve value of the desired negotiation subject as determined from the RVI, whereby unsuccessful bidders will face a premium which effectively, but not actually, increases the reserve value of the desired negotiation subject. The reserve value is not changed. Rather, when unsuccessful bidders submit later bids on the negotiation subject, the BVI will not be compared to only the reserve value as determined from the RVI, but will be compared to the summation of the reserve value and the penalty premium value. This penalty is preferably tailored to the individual bidder.

When one or more of the penalties is assessed against the bidder in Step 604, the terms of the penalty, and all relevant information pertaining to the enforcement of the penalty, are added in Step 610 to the historical bidding practice infonnation of the bidder. In Step 614, the updated historical bidding practice information is stored in the escrow database 110 with reference to the BII 180. As illustrated in Figure 5, when the SAS 100 seeks to determine whether the bidder should be permitted to submit BVI for a desired negotiation subject, the SAS 100 accesses this historical bidding practice information, and specifically information added as a result of the penalty, to make such a determination.

While the present invention has been described in detail with reference to particular embodiments, it will be recognized that many modifications and variations are possible without departure from the scope and spirit of the invention. For example, the invention may be utilized on any computer network, such as corporate Intranets and other networked systems, and is not limited to the Internet on the World Wide Web.

Alternatively, the method can be practiced using electronic mail, voice mail, facsimile or postal mail. It will also be appreciated that many combinations of servers and interfaces may be used for accessing the data source, and the data source may be other than a relational database, such as an ASCII text file, or some other type of binary file.

Other methods of providing the information to the SAS 100 may also be used. Infonnation such as the Oil 160, NSII 170 and BII 180, need not be delivered from or through the offeror interface and/or the bidder interface, but rather can be delivered from or through the MAS 140, or any other node or nodes.

While the RVI 185 may be known to users other than the transmitting offeror and the receiving SAS 100, and while some of the information included in the RVI 185 may be obtainable from other sources, the infonnation included in the RVI 185 cannot be obtained from this RVI 185 delivery by users other than the transmitting offeror and the receiving SAS 100 or users authorized by the transmitting offeror. Similarly, while the BVI 190 may be known to users other than the transmitting bidder and the receiving SAS 100, and while some of the information included in the BVI 190 may be obtainable from other sources, the information included in the BVI 190 cannot be obtained from this BVI 190 delivery, by users other than the transmitting bidder and the receiving SAS 100 or users authorized by the transmitting bidder.

For any specific transaction, the Oil 160, NSII 170 and BII 180 provided to any other users of the system must each have at least one common feature with the respective coπesponding Oil 160, NSII 170 and BII 180 received by the SAS 100, so that the infoπnation can be matched as necessary by the SAS 100. As a specific example, it must be certain that each of the Oil 160 and NSII 170 for which the SAS 100 is receiving RVI 185 has at least one common feature with the respective conesponding Oil 160 and NSII 170 in the merchandising database 150. As another example, it must be certain that each of the Oil 160, NSII 170 and BII 180 for which the SAS 100 is receiving BII 180 has at least one common feature with the respective Oil 160, NSII 170 and BII 180 in the merchandising database 150.

For any specific transaction, the SAS 100 must be able to positively identify the transmitter of any message that may include Oil 160, NSII 170, BII 180, RVI 185, BVI 190 and or other relevant information. Additionally, the SAS 100 must also be assured that the information has not been compromised during the transmission. These features enable the SAS 100 to be certain that the information has been transmitted by a trusted source, and that the SAS 100 has received the information which the trusted source intended to provide to the SAS 100. The encryption, time stamps and digital signature protocols ensure that each message sent from an MAS 140 to the SAS 100 comprises an indelible, inevocable and iπefutable communication therebetween.

The Oil 160 comprises information that can be used to identify the offeror. Such information can include the name of the offeror, an identification or reference indicator associated with the offeror, an address of the offeror, a phone number of the offeror, an e- mail address of the offeror, a company name of the offeror or any other identifying characteristic which may be used to identify the offeror. The Oil 160 may also include, if necessary, a login name and password of the offeror, for example, if such information is required by the MAS 140. The BII 180 comprises information that can be used to identify the bidder. Such information can include the name of the bidder, an identification or reference indicator associated with the bidder, an address of the bidder, a phone number of the bidder, an e- mail address of the bidder, a company name of the bidder or any other identifying characteristic which may be used to identify the bidder. The BII 180 may also include, if necessary, a login name and password of the bidder, for example, if such information is required by the MAS 140.

The NSII 170 comprises information that can be used to identify the negotiation subject. Such information can include the name of the negotiation subject, the name of the type of negotiation subject, a description of the negotiation subject, one or more identifying characteristics of the negotiation subject, one or more characteristics of the usefulness of the negotiation subject, or any other information which, depending on the industry and/or market to which the present invention is tailored, can be used to determine characteristics of the negotiation subject which may be used by a prospective bidder to gauge the value of the negotiation subject to the bidder. The term "negotiation subject" herein may refer, as applicable depending on the industry and/or market to which the present invention is tailored, to goods; services such as vacation packages, consulting services, accounting services, legal services and other services; other objects of negotiations such as the outcome of a litigated matter or other dispute, or the salary of a potential hires, any other subject matter that may be the subject of negotiations, or any combination of the foregoing.

The RVI 185 comprises information that may be used to determine a reserve value that the offeror has placed on the desired negotiation subject. Such information can include a willingness-to-sell price, but may also include information concerning desired and/or possible delivery times, delivery risks, credit risks, other risks, tolerance to risks and other information depending on the industry and/or market to which the present invention is tailored. That is, information that can be used to determine a reserve value may be applicable to one or more industries and/or markets. Certain industries and/or markets may have unique RVI 185 requirements. Similarly, the BVI 190 comprises information that can be used to determine a bid value that the bidder has placed on the desired negotiation subject. Such information can include a willingness-to-pay price, but may also include information concerning desired and/or possible delivery times, delivery risks, credit risks such as a credit limit of the bidder, other risks, tolerance to risks and other infonnation depending on the industry and/or market to which the present invention is tailored. That is, information that can be used to detennine a bid value may be applicable to one or more industries and/or markets. Certain industries and/or markets may have unique BVI 190 requirements. The RVI 185 and BVI 190 is processed by the SAS 100, as discussed below, when using the RVI 185 and BVI 190 to apply result determination rales during the negotiation.

Furthermore, the present invention is not limited to systems in which offerors first provide NSII 170 for negotiation subjects that the offerors desire to offer for negotiation and which can be subsequently browsed by bidders in search of negotiation subjects for which the bidders desire to negotiate. It can also be tailored to systems in which bidders first provide NSII 170 for negotiation subjects for which the bidders desire to negotiate, which can be subsequently browsed by offerors in search of bidders for the negotiation subjects which the offerors desire to offer for negotiation. In such embodiments, the roles of offerors and bidders will be reversed, h addition, rather than being applicable only to systems where items are posted and thereafter selected, the present invention may also be tailored to allow for direct solicitation from an offeror to a bidder, or from a bidder to an offeror. It should also be noted that the terms "offeror" and "bidder", as used herein, are intended to be generic, and applicable to any "negotiation subject" to which the present invention is tailored. For example, if the "negotiation subject" is a litigated matter, the term "offeror" may refer to a plaintiff and the term "bidder" may refer to a defendant, or vice versa. Or, for example, if the "negotiation subject" is the salary of a potential employee, the term "offeror" may refer to the potential employee and the term "bidder" may refer to the potential employer. Other such meaning substitutions are possible and expected as the present invention can be tailored to a variety of industries and/or markets in which negotiations may be used. Those skilled in the art will recognize that the method and system of the present invention has many applications, and that the present invention is not limited to the representative examples disclosed herein. The scope of the invention is only limited by that of the claims appended hereto.

Claims

WHAT IS CLAIMED IS:

1. A method for conducting a negotiation for a negotiation subject between an offeror and a bidder, comprising: a) providing an escrow controller for: i) receiving reserve value information from the offeror; ii) receiving bid value information from the bidder; and iii) applying at least one result determination rule to at least one of said reserve value information and said bid value information to determine a negotiation result; b) wherein said reserve value information is not disclosed by said escrow controller to the bidder prior to the application of said result detennination rale and said bid value information is not disclosed by said escrow controller to the offeror prior to

« the application of said result determination rale.

2. The method of claim 1, wherein said reserve value information comprises at least one of a desired quantity, a desired quality, a desired outcome, a willingness-to-sell price, a desired delivery time, a possible delivery time, a delivery risk, a credit risk and an indicator of tolerance to risk, information regarding employment history, information regarding academic credentials, information regarding a personality trait, a commercial status of a company, information regarding benefits offered by a company, a location of a company office, information regarding costs of litigation, information regarding tolerance to a prolonged litigation schedule, information regarding alternate means of redress, information regarding the ability to absorb litigation costs and information regarding a desire to avoid publicity.

3. The method of claim 1 , wherein said bid value information comprises at least one of a desired quantity, a desired quality, a desired outcome, a willingness-to-sell price, a desired delivery time, a possible delivery time, a delivery risk, a credit limit, a credit risk, an indicator of tolerance to risk, information regarding employment history, information regarding academic credentials, information regarding a personality trait, a commercial status of a company, infonnation regarding benefits offered by a company, a location of a company office, information regarding costs of litigation, information regarding tolerance to a prolonged litigation schedule, infonnation regarding alternate means of redress, information regarding the ability to absorb litigation costs and information regarding a desire to avoid publicity.

4. The method of claim 1, further comprising: a) providing said escrow controller for: i) receiving offeror identification information associated with the offeror; ii) receiving negotiation subject identification information associated with the negotiation subject; and iii) receiving bidder identification information associated with the bidder; b) wherein said escrow controller applies said result determination rale to at least one of said offeror identification information, said negotiation subject identification infonnation and said bidder identification information.

5. The method of claim 4, wherein said offeror identification information comprises at least one of an identifying characteristic of the offeror, the name of the offeror, an identification number associated with the offeror, a reference indicator associated with the offeror, an address of the offeror, a phone number of the offeror, an e-mail address of the offeror, a company name of the offeror, a login name of the offeror and a password of the offeror.

6. The method of claim 4, wherein said negotiation subj ect identification information comprises at least one of an identifying characteristic of the negotiation subject, the name of the negotiation subject, the name of the type of negotiation subject, a description of the negotiation subject and a characteristic of the usefulness of the negotiation subject.

7. The method of claim 4, wherein said bidder identification information comprises at least one of an identifying characteristic of the bidder, the name of the bidder, an identification number associated with the bidder, a reference indicator associated with the bidder, an address of the bidder, a phone number of the bidder, an e-mail address of the bidder, a company name of the bidder, a login name of the bidder and a password of the bidder.

8. The method of claim 1, wherein a) said bid value information comprises a bid time value and b) applying said result determination rale comprises comparing said bid time value to a rule time value.

9. The method of claim 8, wherein said bid time value comprises a specific time.

10. The method of claim 8, wherein said rale time value comprises at least one of a specific time and a time interval.

11. The method of claim 4, wherein a) said bidder identification information comprises a bidder time value and c) applying said result determination rale comprises comparing said credit limit to said willingness-to-pay price and said outstanding payment obligation.

19. The method of claim 4, further comprising: a) receiving historical bidding practice information of the bidder, said historical bidding practice information comprising prior bid value information associated with the bidder; b) wherein applying said result determination rale comprises comparing said historical bidding practice information with at least one of said offeror identification information, said negotiation subject identification information, said bidder identification information, said reserve value information and said bid value information.

20. The method of claim 19, wherein said historical bidding practice information comprises at least one penalty term assessed against the bidder.

21. The method of claim 20, wherein said penalty term comprises at least one of a penalty time value, a penalty geographic value and penalty premium value.

22. The method of claim 21, wherein said penalty time value comprises at least one of a specific time and a time interval.

23. The method of claim 21, wherein said penalty geographic value comprises at least one of a citizenship, a residence, a location, and a principal place of business.

24. The method of claim 21, wherein said penalty premium value comprises a penalty price.

25. The method of claim 4, further comprising: a) receiving at least one penalty term assessed against the bidder;

53 b) applying said result determination rale comprises comparing said bidder time value to a rale time value.

12. The method of claim 11 , wherein said bidder time value comprises at least one of a specific time and a time interval.

13. The method of claim 11, wherein said rale time value comprises at least one of a specific time and a time interval.

14. The method of claim A, wherein a) said bidder identification information comprises a bidder geographic value and b) applying said result determination rale comprises comparing said bidder geographic value to a rale geographic value.

15. The method of claim 14, wherein said bidder geographic value comprises at least one of a citizenship, a residence, a location and a principal place of business.

16. The method of claim 14, wherein said rule geographic value comprises at least one of a citizenship, a residence, a location and a principal place of business.

17. The method of claim 1, wherein a) said bid value information comprises a willingness-to-pay price of the bidder and a credit limit of the bidder and b) applying said result determination rale comprises comparing said credit limit to said willingness-to-pay price.

18. The method of claim 1, wherein: a) the bidder has at least one outstanding payment obligation; b) said bid value information comprises a willingness-to-pay price of the bidder and a credit limit of the bidder; and

52 c) applying said result determination rale comprises comparing said credit limit to said willingness-to-pay price and said outstanding payment obligation.

53 b) wherein applying said result determination rule comprises comparing said penalty term with at least one of said offeror identification infoπnation, said negotiation subject identification infoπnation, said bidder identification information, said reserve value information and said bid value information to determine if the bidder has complied with said penalty term.

26. The method of claim 25, wherein said penalty term comprises at least one of a penalty time value, a penalty geographic value and a penalty premium value.

27. The method of claim 26, wherein said penalty time value comprises at least one of a specific time and a time interval.

28. The method of claim 26, wherein said penalty geographic value comprises at least one of a citizenship, a residence, a location, and a principal place of business.

29. The method of claim 26, wherein said penalty premium value comprises a penalty price.

30. The method of claim 1, further comprising: a) receiving offeror conflict information associated with the offeror; and b) receiving bidder conflict information associated with the bidder; c) wherein applying said result determination rule comprises comparing said offeror conflict information to said bidder conflict information.

31. The method of claim 30, wherein at least one of said offeror conflict information and said bidder conflict information comprises at least one of a geographic location, information concerning a political conflict, infoπnation concerning a legal proceeding, a principal place of business, the identity of a legal representative and the identity of an accounting representative.

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32. The method of claim 1, wherein said result determination rule comprises at least one result value determination rale.

33. The method of claim 32, wherein applying said result value determination rale comprises determining a bid value using said bid value infonnation and determining a reserve value using said reserve value information.

34. The method of claim 33, wherein applying said result value determination rale further comprises determining that said negotiation result is a failure when said bid value is less than said reserve value and notifying the bidder of said negotiation result.

35. The method of claim 33, wherein applying said result value determination rale further comprises determining a result value when said bid value is not less than said reserve value.

36. The method of claim 35, wherein said result value is selected from the group consisting of: a) a result value equal to said bid value; b) a result value equal to said reserve value; and c) a result value greater than said reserve value and less than said bid value.

37. The method of claim 35, wherein said reserve value information comprises a willingness-to-sell price and said bid value information comprises a willingness-to- pay price and said result value is a transaction strike price selected from the group consisting of: a) a transaction strike price equal to said willingness-to-pay price; b) a transaction strike price equal to said willingness-to-sell price; and

55 c) a transaction strike price greater than said willingness-to-sell price and less than said willingness-to-pay price.

38. The method of claim 37, wherein said transaction strike price is the algebraic mean between said willingness-to-sell price and said willingness-to-pay price.

39. The method of claim 37, wherein determining said transaction strike price comprises randomly determining said transaction strike price.

40. The method of claim 1, further comprising assessing a penalty against the bidder.

41. The method of claim 40, wherein assessing said penalty comprises determining at least one penalty term comprising at least one of a penalty time value associated with the bidder, a penalty geographic value associated with the bidder, a penalty premium value associated with the bidder, and a penalty premium price associated with the bidder.

42. The method of claim 41, wherein assessing said penalty further comprises updating historical bidding practice information of the bidder with said penalty term.

43. The method of claim 1, wherein said escrow controller is non-human.

44. A system for conducting a negotiation for a negotiation subject between an offeror and a bidder, comprising: a) an escrow controller; b) means for communicating between an offeror interface and said escrow controller; and c) means for communicating between a bidder interface and said escrow controller; d) said escrow controller being adapted to receive reserve value information from said offeror interface and bid value information from said bidder interface;

56 e) said escrow controller being further adapted to apply at least one result determination rale to at least one of said reserve value information and said bid value information to determine a negotiation result; f) wherein said reserve value information is not disclosed by said escrow controller to the bidder prior to the application of said result determination rule and said bid value information is not disclosed by said escrow controller to the offeror prior to the application of said result determination rule.

45. The system of claim 44, wherein said reserve value information comprises at least one of a desired quantity, a desired quality, a desired outcome, a willingness-to-sell price, a desired delivery time, a possible delivery time, a delivery risk, a credit limit, a credit risk, an indicator of tolerance to risk, information regarding employment history, information regarding academic credentials, information regarding a personality trait, a commercial status of a company, information regarding benefits offered by a company, a location of a company office, information regarding costs of litigation, information regarding tolerance to a prolonged litigation schedule, information regarding alternate means of redress, information regarding the ability to absorb litigation costs and information regarding a desire to avoid publicity.

46. The system of claim 44, wherein said bid value information comprises at least one of a desired quantity, a desired quality, a desired outcome, a willingness-to-sell price, a desired delivery time, a possible delivery time, a delivery risk, a credit risk and an indicator of tolerance to risk, information regarding employment history, information regarding academic credentials, information regarding a personality trait, a commercial status of a company, information regarding benefits offered by a

57 company, a location of a company office, infonnation regarding costs of litigation, information regarding tolerance to a prolonged litigation schedule, information regarding alternate means of redress, information regarding the ability to absorb litigation costs and information regarding a desire to avoid publicity.

47. The system of claim 44, wherein: a) said escrow controller is further adapted to receive: i) offeror identification information from at least one of said offeror interface and said bidder interface; ii) negotiation subject identification infonnation from at least one of said offeror interface and said bidder interface; and iii) bidder identification information from at least one of said offeror interface and said bidder interface; and b) said escrow controller is adapted to apply said result determination rule to at least one of said offeror identification information, said negotiation subject identification information and said bidder identification infonnation.

48. The system of claim 47, wherein said offeror identification information comprises at least one of an identifying characteristic of the offeror, the name of the offeror, an identification number associated with the offeror, a reference indicator associated with the offeror, an address of the offeror, a phone number of the offeror, an e-mail address of the offeror, a company name of the offeror, a login name of the offeror and a password of the offeror.

49. The system of claim 47, wherein said negotiation subject identification information comprises at least one of an identifying characteristic of the negotiation subject, the

58 name of the negotiation subject, the name of the type of negotiation subject, a description of the negotiation subject and a characteristic of the usefulness of the negotiation subject.

50. The system of claim 47, wherein said bidder identification information comprises at least one of an identifying characteristic of the bidder, the name of the bidder, an identification number associated with the bidder, a reference indicator associated with the bidder, an address of the bidder, a phone number of the bidder, an e-mail address of the bidder, a company name of the bidder, a login name of the bidder and a password of the bidder.

51. The system of claim 44, wherein at least one of said means for placing an offeror interface in communication with said escrow controller and said means for placing a bidder interface in communication with said escrow controller comprises a merchandising controller.

52. The system of claim 44, wherein a) said bid value information comprises a bid time value and b) said result determination rule comprises a comparison of said bid time value to a rule time value.

53. The system of claim 52, wherein said bid time value comprises a specific time.

54. The system of claim 52, wherein said rale time value comprises at least one of a specific time and a time interval.

55. The system of claim 47, wherein a) said bidder identification information comprises a bidder time value and

59 b) said result determination rale comprises a comparison of said bidder time value to a rale time value.

56. The system of claim 55, wherein said bidder time value comprises at least one of a specific time and a time interval.

57. The system of claim 55, wherein said rale time value comprises at least one of a specific time and a time interval.

58. The system of claim 47, wherein a) said bidder identification information comprises a bidder geographic value and b) said result detennination rale comprises a comparison of said bidder geographic value to a rale geographic value.

59. The system of claim 58, wherein said bidder geographic value comprises at least one of a citizenship, a residence, a location and a principal place of business.

60. The system of claim 58, wherein said rule geographic value comprises at least one of a citizenship, a residence, a location and a principal place of business.

61. The system of claim 44, wherein a) said bid value information comprises a willingness-to-pay price of the bidder and a credit limit of the bidder and b) said result determination rale comprises a comparison of said credit limit to said willingness-to-pay price.

62. The system of claim 44, wherein: a) the bidder has at least one outstanding payment obligation; b) said bid value information comprises a willingness-to-pay price of the bidder and a credit limit of the bidder; and

60 c) said result determination rale comprises a comparison of said credit limit to said willingness-to-pay price and said outstanding payment obligation.

63. The system of claim 47, wherein: a) said escrow controller is further adapted to receive historical bidding practice information of the bidder, said historical bidding practice information comprising prior bid value information associated with the bidder; and b) said result determination rale comprises a comparison of said historical bidding practice information with at least one of said offeror identification information, said negotiation subject identification infoπnation, said bidder identification information, said reserve value information and said bid value information.

64. The system of claim 63, wherein said historical bidding practice information comprises at least one penalty term assessed against the bidder.

65. The system of claim 64, wherein said penalty term comprises at least one of a penalty time value, a penalty geographic value and a penalty premium value.

66. The system of claim 65, wherein said penalty time value comprises at least one of a specific time and a time interval.

67. The system of claim 65, wherein said penalty geographic value comprises at least one of a citizenship, a residence, a location, and a principal place of business.

68. The system of claim 65, wherein said penalty premium value comprises a penalty price.

69. The system of claim 47, wherein: a) said escrow controller is further adapted to receive at least one penalty term assessed against the bidder; and

61 b) said result determination rale comprises a comparison of said penalty term with at least one of said offeror identification information, said negotiation subject identification infonnation, said bidder identification information, said reserve value information and said bid value information to determine if the bidder has complied with said penalty term.

70. The system of claim 69, wherein said penalty term comprises at least one of a penalty time value, a penalty geographic value and penalty premium value.

71. The system of claim 70, wherein said penalty time value comprises at least one of a specific time and a time interval.

72. The system of claim 70, wherein said penalty geographic value comprises at least one of a citizenship, a residence, a location, and a principal place of business.

73. The system of claim 70, wherein said penalty premium value comprises a penalty price.

74. The system of claim 44, wherein said escrow controller is further adapted to receive offeror conflict information associated with the offeror and bidder conflict information associated with the bidder and said result determination rale comprises a comparison of said offeror conflict information to said bidder conflict information.

75. The system of claim 74, wherein at least one of said offeror conflict information and said bidder conflict infonnation comprises at least one of a geographic location, information concerning a political conflict, infonnation concerning a legal proceeding, a principal place of business, the identity of a legal representative and the identity of an accounting representative.

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76. The system of claim 44, wherein said result determination rale comprises at least one result value determination rale.

77. The system of claim 76, wherein said escrow controller is further adapted to determine a bid value using said bid value infoπnation and to determine a reserve value using said reserve value information.

78. The system of claim 77, wherein said escrow controller is further adapted to determine that said negotiation result is a failure when said bid value is less than said reserve value and to notify the bidder of said negotiation result.

79. The system of claim 77, wherein said escrow controller is further adapted to determine a result value when said bid value is not less than said reserve value.

80. The system of claim 79, wherein said result value is selected from the group consisting of: a) a result value equal to said bid value; b) a result value equal to said reserve value; and c) a result value greater than said reserve value and less than said bid value.

81. The system of claim 79, wherein said reserve value information comprises a willingness-to-sell price, said bid value information comprises a willingness-to-pay price and said result value is a transaction strike price selected from the group consisting of: a) a transaction strike price equal to said willingness-to-pay price; b) a transaction strike price equal to said willingness-to-sell price; and c) a transaction strike price greater than said willingness-to-sell price and less than said willingness-to-pay price.

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82. The system of claim 81, wherein said transaction strike price is the algebraic mean between said willingness-to-sell price and said willingness-to-pay price.

83. The system of claim 81, wherein said escrow controller is further adapted to randomly determine said transaction strike price.

84. The system of claim 44, wherein said escrow controller is further adapted to assess a penalty against the bidder.

85. The system of claim 84, wherein said escrow controller is further adapted to determine at least one penalty term comprising at least one of a penalty time value associated with the bidder, a penalty geographic value associated with the bidder, a penalty premium value associated with the bidder, and a penalty premium price associated with the bidder.

86. The system of claim 85, wherein said escrow controller is further adapted to update historical bidding practice information of the bidder with said penalty term.

87. The system of claim 44, wherein said escrow controller is non-human.

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