Computer Method and System for Intermediated Exchanges

Abstract

In a preferred embodiment, this invention includes software processes distributed on one or more computer systems that exchange messages in order to facilitate an intermediated exchange of financial commodities between a plurality of participants. The messages are exchanged according to a preferred protocol that leads to a satisfactory exchange that meets the objectives of the participants, and that substantially maximizes in a fair manner the total amount of financial commodities exchanged. Optionally, the invention employs heuristic rules in association with the preferred protocol that adapt the protocol to the time and exchange requirements of financial commodities. In other embodiments, this invention is equally applicable to the exchange of any tangible or intangible commodities. In a general embodiment, this invention further includes a preferred message-exchange protocol for the construction of computer programs representing exchange participants and an intermediary. These constructed computer programs exchange messages such that a satisfactory intermediated exchange of commodities is substantially certain to be achieved.

Description

1. FIELD OF THE INVENTION [0001] The field of this invention is computerized information systems directed to commercial applications; in particular computer systems that facilitate an automatic exchange of commodities between users of such a computer system according to the users' goals. 2. BACKGROUND [0002] An intermediated exchange involves negotiated trading between two or more participants through a third-party, the intermediary. Specifically, in such an intermediated exchange, the participants do not communicate directly with each other, but rather through the third-party intermediary. Examples of items traded include intangibles, such as securities (stocks, bonds, and options) commodity futures, collateralized mortgage obligations, and pollution rights, as well as tangibles, such as copper or soy beans. All such items involved in an intermediated exchange are herein referred to as “commodities.” In fact, any item that can be traded is a commodity. [0003] In the case of stocks ...

AI Technical Summary

Benefits of technology

[0010] The system of the preferred embodiment implements a negotiation protocol that facilitates the intermediated exchange of commodities between any number of participants according to their goals. This negotiation protocol specifies how to search through possible combinations of exchanges between participants in order to identify the combination that balances the goals of the intermediary with the goals of the participants in the exchange. The protocol addresses both the determination of which commodities are exchanged among participants and the amount of each commodity exchanged. It also provides a solution for the competitive equilibrium problem as it is applied to intermediated exchanges. A computer program constructed according to this protocol, together with accompanying hardware, permits participants electronically and automatically to carry out negotiations for the transfer of commodities through an intermediary.

[0012] According to this invention, the e-agents negotiate an intermediated exchange through an intermediary computer program. E-agents, acting in conjunction with the intermediary, process data so as to substantially maximize a tradeoff between the amounts exchanged and the fairness of the exchange. An intermediary program constructed according to this invention acts to substantially maximize the aggregate number of units of commodities exchanged in a fair manner that is acceptable to the participants.

Problems solved by technology

It is believed that no current network provides such more-complex exchanges.

Currently, computer systems that support existing markets or crossing networks are not able to accommodate the evolving needs of participants, such as investment managers and others, who seek to trade multiple commodities to achieve general portfolio goals.

Currently, no satisfactory solution exists for that problem as applied to the specific situations of intermediated exchanges.

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