Computer-Based Method and Computer Program Product for Setting Floor Prices for Items Sold at Auction

A computer program product, comprising a non-transitory computer-usable storage medium having computer-readable instructions embodied therein, the computer-readable program code adapted to be executed by a server to implement a method for setting a reserve price for an item to be sold at auction, the method comprising the steps of:

• identifying a plurality of features for evaluating predicted price differentials between the item to be sold and items in a set of comparative items that were previously sold;
• evaluating the predicted price differentials between the item to be sold and the items in the set of comparative items based on estimated state values for the plurality of features;
• calculating values of a distance metric representing distances between the item to be sold and items in the set of comparative items, each calculated distance value indicating a degree of similarity between the item to be sold and a respective item in the set of comparative items;
• selecting a subset of most similar items from the set of comparative items according to the calculated distances;
• calculating a weighting function for each item in the subset of most similar items;
• estimating the reserve price for the item to be sold as a function of the weighting functions and price differentials for the subset of most similar items;
• transmitting the reserve price over a secure link to a client device updating the estimated state values as a function of an actual sales price for the item to be sold and a current estimate of uncertainty for the estimated state values;
• and
• storing the updated state values in a database of the server.