A Framework for the Study of Pricing in Integrated Networks

   Colin Parris, Srinivasan Keshav, and Domenico Ferrari

                          ABSTRACT

     Integrated networks of the near future are expected  to
provide  a  wide  variety  of  services, which could consume
widely differing resources. We present a framework for pric-
ing services in integrated networks, and study the effect of
pricing on user behavior and network performance.  We  first
describe  a network model that is simple, yet models details
such  as  the  wealth  distribution  in  society,  different
classes  of  service,  peak  and  off-peak  traffic and call
blocking due to budgetary constraints.

     We then perform experiments  to  study  the  effect  of
setup,  per packet and peak load prices on the blocking pro-
bability of two classes of calls passing  through  a  single
node  enforcing admission control. Some selected results are
that a) increasing prices first increases the net revenue to
a  provider,  then  causes  a  decrease b) peak-load pricing
spreads network utilization  more  evenly,  raising  revenue
while simultaneously reducing call blocking probability.

     Finally, we introduce  a  novel  metric  for  comparing
pricing schemes, and prove that for the most part, a pricing
scheme involving setup  prices  is  better  than  a  pricing
scheme with no setup cost.