Revenue raising auction processes for public goods

A method implemented on a server based computing device, of selling multiple units of one or more public goods in a revenue raising auction process for public goods, to a community of beneficiaries, comprising:

• receiving input on said server based computing device from an auction manager of a public goods offering comprising:
• a schedule of increments of a plurality of selected units of a public good potentially
• available to a community of beneficiaries for a public goods offering;
• publishing availability of said plurality of selected units of public goods offering, and
• publishing rules for auction for said public goods offering;
• said rules including at least one rule selected from the group of at least one of requiring and not requiring said auction manager to publish the minimum thresholds of monetary support necessary for delivery of said increments of said plurality of selected units of public goods offering;
• receiving first bid offerings from participant bidder based client devices by said server based computing device;
• receiving a succession of marginal bid offerings from said participant bidder based client devices by said server based computing device until said participant bidders have provided a cumulative set of bid offerings including one bid offering on each of said plurality of units of public goods;
• said server based computing device determining individualized prices of said auction process that enable raising of revenues to cover costs of provision of said plurality of selected units of public good, including normal return to business;
• said server based computing device determining individualized prices of a pricing framework that approximates the theoretical ideal of a Lindahl pricing framework by creating incentives for each participant bidder that identify a willingness of the participant bidder to pay a price for each marginal unit of public good that approaches each individual's actual marginal benefit for said marginal unit of public good, said pricing framework comprising the steps of:
• determining a collective amount of revenue that may be derived from the collective set of bids received from participant bidders within said community of beneficiaries,
• creating incentives for said participant bidders to contribute revenue toward said delivery of public goods by determining said final number of units to be sold by implementing an algorithm on said computing device to evaluate said collective set of bids sequentially for each unit against the delivery cost of each unit within said available plurality of selected units of public goods;
• whereby said algorithm of said pricing framework determines the final unit sold, such that the sum of the collective set of bids on said final unit sold offers sufficient potential revenue to at least equal the delivery cost of said final unit sold and said algorithm of said pricing framework uses a pre-specified rule to determine a price-per-unit sold for each of said individuals;
• said pre-specified rule of said pricing framework enhancing incentives for said participant bidders to offer bids on each unit reflecting each said participant bidder's full marginal values for each corresponding unit, while establishing a price-per-unit for each of said participant bidder's to pay, comprising the corresponding participant bidder's share of the cost of delivering said final number of units sold in said auction process;
• sequentially requesting bids from each participant bidder to make successive bids on each unit of public good to stimulate subsequent higher bids that come closer to each participant bidder's maximum willingness to pay for each said marginal unit of public good;
• wherein said pricing framework tabulates bids from each of said participant bidders into a schedule of offers to pay a maximum price-per-unit on each particular unit and on any units delivered up to said particular unit;
• said method reducing free-riding behavior of beneficiaries of said plurality of selected units of public goods by said auction manager altering successive incentives for marginal bids made by the participant bidders by making said successive bids on said marginal units after the first unit to be at least one of (i) relevant and (ii) irrelevant, given the auction manager's choice to use at least one of (i) a forward bid evaluation method and (ii) a backward bid evaluation method, thereby said auction method reducing incentives of said beneficiaries of said plurality of selected units of public goods to free ride at the margin and thereby encouraging higher bids that approach the individual participant bidder's full value for the marginal unit;
• wherein said forward bid evaluation method makes relevant said successive bids on said marginal units after said first unit by requiring that the sum of all bids received on an earlier unit relative to the marginal unit for which bids would next be evaluated to cover the delivery cost on said earlier unit;
• and wherein said backward bid evaluation method makes irrelevant said successive bids on units beginning from the final unit backward toward said first unit when the sum of all bids received on the marginal unit for which bids are being evaluated fail to cover the delivery cost on said marginal unit for which bids are being evaluated;
• said auction method further comprising a practical method to elicit higher bids said server based computing device from said participant bidders among said community of beneficiaries of said plurality of selected units of public goods;
• said auction method establishing a contract right to deliver said plurality of selected units of public goods on said server based computing device to the community of the participant bidders of said community of beneficiaries,
• wherein said auction manager uses said server based computing device to control delivery of said plurality of selected units of public goods to said participant bidders of said community of beneficiaries.