A pricing approach for bandwidth allocation in differentiated service networks

Authors:
Yongpei Guan;Weilai Yang;Henry Owen;Douglas M. Blough
Affiliations:
School of Industrial Engineering, University of Oklahoma, Norman, OK 73019, USA;School of Electrical and Computer Engineering, Georgia Institute of Technology, Atlanta, GA 30332, USA;School of Electrical and Computer Engineering, Georgia Institute of Technology, Atlanta, GA 30332, USA;School of Electrical and Computer Engineering, Georgia Institute of Technology, Atlanta, GA 30332, USA
Venue:
Computers and Operations Research
Year:
2008

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Abstract

We present a decentralized auction-based scheme for bandwidth allocation and pricing in a differentiated service-based network. Different classes of clients provide their own expected bandwidth price and required amount of bandwidth. A service provider decides the admission price and differentiated service provided for each class of clients. We introduce mathematical formulations and provide a solution approach to maximize the service provider's revenue. For a single bottleneck link case, a polynomial-time algorithm is developed to obtain an optimal solution. For a multiple bottleneck link case, a heuristic algorithm is developed to solve the problem. The effectiveness of our solution approach is validated by simulation results, which compare our algorithms against the traditional flat-rate pricing approach.