Optimal pricing strategy with compensation when QoS is not satisfied

Pricing has been recently regarded as a means to control congestion in communication networks and, therefore, satisfy quality-of-service (QoS) requirements. In a network without connection access control, though, available proposals are generally based on average values, and QoS requirements can be...

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Bibliographic Details
Published in:Annales des télécommunications 2010-04, Vol.65 (3-4), p.163-170
Main Authors: Tuffin, Bruno, Le Cadre, Hélène, Bouhtou, Mustapha
Format: Article
Language:English
Subjects:
Circuits
Communications Engineering
Computer Communication Networks
Computer Science
Engineering
Information and Communication
Information Systems and Communication Service
Networking and Internet Architecture
Networks
R & D/Technology Policy
Signal,Image and Speech Processing
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Summary:Pricing has been recently regarded as a means to control congestion in communication networks and, therefore, satisfy quality-of-service (QoS) requirements. In a network without connection access control, though, available proposals are generally based on average values, and QoS requirements can be unsatisfied for a part of the traffic. We propose here a simple pricing model for which, if delay exceeds a predefined threshold, a compensation is provided. We study this model by investigating first the level of (elastic) demand for fixed parameters, made of price, threshold, and compensation values, and then find the values maximizing the corresponding revenue. We also compare the results with those when no compensation is provided.
ISSN:0003-4347
1958-9395
DOI:10.1007/s12243-009-0147-5