Abstract
We consider link pricing in packet-switched networks with fixed routing and random congestion losses. Network users are assumed to be greedy in the sense that each user increases its traffic rate in proportion to profit per packet it generates. The main goal of the paper is to devise pricing principles that maximize social welfare, which is taken as either the sum of goodputs or the sum of log-goodputs in the network. We adopt a deterministic fluid model whose analysis leads to pricing policies that stabilize packet generation rates at local maxima of social welfare for a rich set of network topologies. We also give decentralized algorithms to compute the price of packet forwarding at each link. Neither computation nor implementation of prices requires per-flow information. Obtained analytical results are verified via packet level simulations.
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