Pricing-Based Control of Large Networks

— In this paper we show that significant simplicity can be exploited for pricing-based control of large networks. We first consider a general loss network with Poisson arrivals and arbitrary holding time distributions. In dynamic pricing schemes, the network provider can charge different prices to the user according to the current utilization level of the network and also other factors. We show that, when the system becomes large, the performance (in terms of expected revenue) of an appropriately chosen static pricing scheme, whose price is independent of the current network utilization, will approach that of the optimal dynamic pricing scheme. Further, we show that under certain conditions, this static price is independent of the route that the flows take. This indicates that we can use the static scheme, which has a much simpler structure than the optimal dynamic scheme, to control large communication networks. We then extend the result to the case of dynamic routing, and show t...

• Type: Conference
• Year: 2001
• Where: IWDC
• Authors: Xiaojun Lin, Ness B. Shroff
• Keywords: Communications, Dynamic Pricing Scheme, IWDC 2001, Pricing Scheme, Static Pricing Scheme