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Title: Pricing Congestible Network Resources
Author: Jeffrey K. MacKie-Mason and Hal R. Varian
Journal: IEEE Journal on Selected Areas in Communications
Volume: 13
Number: 7
Month: September
Year: 1995
DOI: 10.1109/49.414634
Abstract: We describe the basic economic theory of pricing a congestible resource such as an FTP server, a router, a Web site, etc. In particular, we examine the implications of "congestion pricing" as a way to encourage efficient use of network resources. We explore the implications of flat pricing and congestion pricing for capacity expansion in centrally planned, competitive, and monopolistic environments. The most common form of Internet pricing is pricing by access, with no usage-sensitive prices. With a fixed set of users, we expect to see greater capacity when usage is not priced, but also greater congestion. However, with greater congestion, congestion-sensitive users might not use the resource.

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@Article{mackie-mason95a,
  author =	 {Jeffrey K. MacKie-Mason and Hal R. Varian},
  title =	 {Pricing Congestible Network Resources},
  journal =	 {{IEEE} Journal on Selected Areas in Communications},
  year =	 1995,
  volume =	 13,
  number =	 7,
  month =	 {September},
  abstract =	 { We describe the basic economic theory of pricing a
                  congestible resource such as an FTP server, a
                  router, a Web site, etc. In particular, we examine
                  the implications of "congestion pricing" as a way
                  to encourage efficient use of network resources. We
                  explore the implications of flat pricing and
                  congestion pricing for capacity expansion in
                  centrally planned, competitive, and monopolistic
                  environments. The most common form of Internet
                  pricing is pricing by access, with no
                  usage-sensitive prices. With a fixed set of users,
                  we expect to see greater capacity when usage is not
                  priced, but also greater congestion. However, with
                  greater congestion, congestion-sensitive users might
                  not use the resource.},
  keywords =     {economics networks auctions},
  doi = 	 {10.1109/49.414634},
  url = 	 {http://jmvidal.cse.sc.edu/library/mackie-mason95a.pdf},
  googleid = 	 {of6i7cs2SuMJ:scholar.google.com/},
  cluster = 	 {16377963244379373217}
}
Last modified: Wed Mar 9 10:14:04 EST 2011