Abstract
We introduce a new dynamic pricing mechanism for controlling congestion in a network shared by non-cooperative users. The network exhibits a congestion externality and users have private information regarding their willingness to pay for network use. The externalities imply that many simple uniform price adjustment processes (e.g., tatonnement) either fail to effectively control flow demands and/or are subject to strategic manipulation. We propose a dynamic discriminatory pricing mechanism design and show that it effectively controls congestion while ensuring the efficient allocation of network capacity. We show the proposed mechanism is robust to strategic manipulation. To the best of our knowledge, there is no other dynamic pricing mechanism in the literature with these properties.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
