NDLI: Congestion-dependent pricing of network services

Content Provider	IEEE Xplore Digital Library
Author	Paschalidis, I.Ch. Tsitsiklis, J.N.
Copyright Year	1993
Abstract	We consider a service provider (SP) who provides access to a communication network or some other form of on-line services. Users initiate calls that belong to a set of diverse service classes, differing in resource requirements, demand pattern, and call duration. The SP charges a fee per call, which can depend on the current congestion level, and which affects users' demand for calls. We provide a dynamic programming formulation of the problems of revenue and welfare maximization, and derive some qualitative properties of the optimal solution. We also provide a number of approximate approaches, together with an analysis that indicates that near-optimality is obtained for the case of many, relatively small, users. In particular, we show analytically as well as computationally, that the performance of an optimal pricing strategy is closely matched by a suitably chosen static price, which does not depend on instantaneous congestion. This indicates that the easily implementable time-of-day pricing will often suffice. Throughout, we compare the alternative formulations involving revenue or welfare maximization, respectively, and draw some qualitative conclusions.
Sponsorship	IEEE Computer Society IEEE Communications Society Association for Computing Machinery (ACM)
Starting Page	171
Ending Page	184
Page Count	14
File Size	339884
File Format	PDF
ISSN	10636692
Volume Number	8
Issue Number	2
Language	English
Publisher	Institute of Electrical and Electronics Engineers, Inc. (IEEE)
Publisher Date	2000-04-01
Publisher Place	U.S.A.
Access Restriction	One Nation One Subscription (ONOS)
Rights Holder	Institute of Electrical and Electronics Engineers, Inc. (IEEE)
Subject Keyword	Pricing Communication networks IP networks Web and internet services Online services Costs Protocols Quality of service Dynamic programming Performance analysis
Content Type	Text
Resource Type	Article
Subject	Computer Networks and Communications Electrical and Electronic Engineering Computer Science Applications Software

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