A Study of Pricing Strategies and Tra c Behavior in Packet Networks

The exponential growth of the Internet in virtually every metric has sparked a discussion about the role of pricing in public data networks. Initial research results demonstrate that priority pricing, congestion pricing, and other pricing schemes have the potential for improving social welfare over at-price schemes. While promising, these initial results have signi cant shortcomings that have limited their applicability; notably that most prior analyses are static and usually focus either on the technical or economical aspects without consideration of the interplay between the two. This paper addresses the need for a detailed study of more realistic networks supporting di erent types of applications. This paper focuses on two major features of these networks: (1) the welfare e ects of di erent pricing mechanisms, and (2) the dynamic stability of price and tra c under di erent pricing schemes and user models.