Congestion-Dependent Pricing of Internet Services (Joint work with John N. Tsitsiklis)

Yannis Paschalidis
Assistant Professor of Manufacturing Engineering
Boston University

Lately, the pricing of the Internet has received a lot of attention. In this talk, I'll consider the case of a service provider (SP) who provides access to a communication network (such as the Internet) or some other form of on-line services. The SP charges a fee per call which can depend on the current congestion level, and which affects users' demand for calls. I'll explore and compare several pricing schemes (either revenue or welfare maximizing), discuss their optimality properties, and draw some qualitative conclusions that lead to alternatives to the current industry practice. Finally, I'll discuss methods for efficiently computing pricing policies of interest.