The following was once here and resurrected with the prescient help of the Wayback Machine. Agorics did most of this research in contract with Sun.

Webmart: Managing Shared Resources by Market Mechanisms

Think about the Information Superhighway: Just like a real highway, as soon as it is expanded, it gets clogged.

Priority mechanisms—such as the diamond lane—are required to manage the traffic and improve the flow. By putting two people in your car, you automatically get priority, and are allowed to drive in the faster diamond lane. To provide a different kind of control, permits or stickers could be sold that would allow you to drive in the fast lane with only one person in your car.

Now imagine there is an interactive computer in your car. You’re rushing to the airport, late for your flight—to get into the diamond lane, you might actually raise your bid while you are driving! It would be worth paying extra to get to the airport on time.

The SunLabs Webmart project is exploring the application of micro-economic principles to the management of system level resources. As a part of this effort we are developing an experimental electronic economy which is being seeded with an initial set of applications, each of which is aimed at exploring a different facet of computational markets.

Webmart Applications:

Network bandwidth auction

All of the workstations connected by an ATM network participate in the dynamic auction of the network’s available bandwidth. The cost of transmitting a cell over the Net is a function of the current demand for network bandwidth. As demand for bandwidth grows, so too does the price. Users define the amount they are willing to pay for a given level of video quality, and when contention occurs, the network bandwidth is allocated to those users who have indicated a higher value through their bids. The market mechanism being used is a running second-price, sealed bid auction, which has several desirable computational as well as economic properties and is implemented as a standard priority-like mechanism.

The users specify to the system that the audio and video being sent to a local workstation have different values to the users at different points in time. In particular, the users may not wish to actively monitor a video program, but instead may be interested only in specific parts of the broadcast. The users may indicate to the system that the audio/video portion of the broadcast is of little value until an active agent that has been monitoring the broadcast detects a subject of interest within the text stream. When such an event is detected, the agent automatically signals to the system that the value of the audio and video portions of the program is now increased and brings the broadcast to the users’ attention. When the users determine that the program is no longer of interest, they can return the audio and video to monitoring mode, indicating the diminished value of the program and reactivating the agent to monitor the text stream for additional topics of interest.

Shared satellite receiving equipment

SunLabs owns a collection of specialized satellite receiving equipment under computer control. Much of this equipment cannot be shared by multiple simultaneous users. This application enforces serial access to these resources and ensures that they are allocated in a way that maximizes the value delivered to the user community. The users select a period of time over which the resource is desired, defines the value they place on it and submits a bid for that time slot. Higher bids are accepted up until the closing time, at which point the highest bidder owns the exclusive right to use the resource for that given slot. This allows the resale of resource reservations, creating a futures market in satellite equipment usage.

Continuous feed of news stories, stock quotes, sport scores, movie reviews

Users pay a monthly subscription fee to receive an electronic scoreboard-style display, which provides a continuously updated stream of current information to the desktop. The information provided by this service provides national and international news stories, stock quotes, sports scores, and movie reviews. This application is implemented with Sun’s new Java programming language and illustrates how Java can be used to present dynamic information streams to clients over the network. Users can personalize the service by subscribing to a specific type of information.

Audio jukebox

Users pay a flat fee in return for playing a chosen track from one of the audio CDs contained within a computer-controlled, multidisk CD changer. In typical operation, multiple requests to play tracks are queued and serviced in a first-come, first-served order. However, users can advance their requests in the queue by providing payments in addition to the amount required to play a track. In addition, a monthly rental fee is required for each CD slot in the disk changer, and royalties are paid to the owner of the CD each time a track from it is played.

Image database browser

An image database browser is integrated with a format conversion service. This application allows the users to locate a desired image, perform a range of different transforms on it, and then preview the results. When the users are satisfied with the image, they can choose to purchase and receive a copy of it. This application not only uses a dynamic pricing mechanism, but also handles the disbursement of royalties to the appropriate parties for each purchase.