Economic Aspects of Network Coding

This work focuses on a cellular system scenario of a single base station broadcasting incoming files (or users) to multiple receivers over a time-varying channel. The basestation sets a price per receiver and per file to maximize its profit. The files may or may not enter the system depending on the price of service, the delay performance and their randomly determined valuations. Under this scenario, we consider the use of Network Coding and Scheduling as the transmission strategies. Our analysis provides approximate characterization of the optimal admission rate, price and revenue as functions of the first and second moments of the service time processes under mild assumptions. We show that optimal network coding window size is highly insensitive to the number of receivers, which suggests that pricing and coding decisions can be decoupled. Moreover, we demonstrate that network coding leads to a significant (almost ten-fold) gain in the revenue compared to scheduling.