A Comparison of Auction and Flat Pricing for Differentiated Service Networks Abstract.pdfVIP

A Comparison of Auction and Flat Pricing for Differentiated Service Networks Weilai Yang , Henry Owen and Douglas M. Blough School of Electrical and Computer Engineering Georgia Institute of Technology Atlanta, GA 30332-0250 USA Abstract based on their bids. We consider a scenario in which the auctioneer In a network with quality of service (QoS) support, takes the customers’ bids and returns the admission pricing is an effective means of dealing with conges- rates (which are also defined as thresholds) for both tion control and revenue generation. In the Internet, price and service offered for each class in a way that the needs of the customers and their applications are aims at maximizing the service provider’s revenue. constantly evolving. An auction based algorithm is The customers bid for the base price, the price sensi- the best choice for this environment because it needs tivity and the required resource assignment. Auction minimal a priori information. In this paper, we pro- based pricing schemes have typically been developed pose an auction based pricing algorithm which lets in a simplified model — the single-link network [3] [6]. customers choose the price as well as the service re- The algorithm we present in this paper does away quired, and in which the service provider decides on with this limitation. the admission price threshold and the service level of Our contributions can be summarized as follows: the differentiated service provided. We then investi- 1) We model the