Article ID: | iaor2008771 |
Country: | United States |
Volume: | 52 |
Issue: | 1 |
Start Page Number: | 39 |
End Page Number: | 53 |
Publication Date: | Jan 2006 |
Journal: | Management Science |
Authors: | Steinberg Richard, Kelly Frank, Anderson Edward |
Keywords: | game theory |
We propose a method for determining how much to charge users of a communication network when they share bandwidth. Our approach can be employed either when a network owner wishes to sell bandwidth for a specified period of time to a number of different users, or when users cooperate to build a network to be shared among themselves. Our proposed contract and balancing mechanism can mediate between rapidly fluctuating prices and the longer time scales over which bandwidth contracts may be traded. An advantage of the process is that it avoids perverse incentives for a capacity provider to increase congestion.