Pricing computer services: queueing effects
Communications of the ACM
Optimal incentive-compatible priority pricing for the M/M/1 queue
Operations Research
Internet economics
Internet cost allocation and pricing
Internet economics
Paris metro pricing for the internet
Proceedings of the 1st ACM conference on Electronic commerce
Internet service classes under competition
IEEE Journal on Selected Areas in Communications
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IEEE Journal on Selected Areas in Communications
Fundamental design issues for the future Internet
IEEE Journal on Selected Areas in Communications
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This paper analyzes a communication network, used by customers with heterogeneous service requirements. We investigate priority queueing as a way to establish service differentiation. It is assumed that there is an infinite population of customers, who join the network as long as their utility (which is a function of the queueing delay) is larger than the price of the service. We focus on the specific situation with two types of users: one type is delay-sensitive (‘voice’), whereas the other is delay-tolerant (‘data’); these preferences are reflected in their utility curves. Two models are considered: in the first the network determines the priority class of the users, whereas the second model leaves this choice to the users. For both models we determine the prices that maximize the provider's profit. Importantly, these situations do not coincide. Our analysis uses elements from queueing theory, but also from microeconomics and game theory (e.g., the concept of a Nash equilibrium).