Jean Walrand – NSF – April 24-25, 2003 1/5
Economic MechanismsGrand Challenge:
Design economic mechanisms that provide incentives for increasing the utility of the
network
Motivation Features Example Research Issues
Economic Mechanisms
Joint work with Jörn Altmann & Linhai He
Jean Walrand – NSF – April 24-25, 2003 2/5
Motivation Different application
requirements Enable new applications
higher revenues Different user utilities
Enable market segmentation higher revenues
More flexible economic arrangements 800-service, third party
billing, … Various players get fair
share of revenues Incentive for improved
services Flexible peering agreements
Economic Mechanisms – Motivation
End-users / Enterprises
Content Service
Providers
Resource Service
Providers
Network Planning and Management
Technology
Economics
Data Collection
Resource Pricing
Business Relationship
Data Collection
Data Collection
Service Provider Ecosystem
Stakeholder
Economically Efficient Resource Allocation
Revenues
Service Quality
increases improve
Jean Walrand – NSF – April 24-25, 2003 3/5
Desirable Features of E.M. Everybody is a player
Not simply social maximization Designed for multi-provider and multi-business
environment Heterogeneous
Incentive-compatible Don’t assume altruism
Scalable 12,000+ ASes
Flexible: Support different service types Dependable service, variable price Dependable price, variable service
Catalyst for ecology Network; Storage; Distribution; Contents; …
Economic Mechanisms – Features
Jean Walrand – NSF – April 24-25, 2003 4/5
Example Simple protocol at
call set up time Game between
providers and users Can be designed for
dependable service Price controls
utilization Analysis shows that
In tandem network with at least 3 providers If demand is the constraint
Cooperation > Nash > Stackleberg
Suggests charging protocol Ideas extend to complex topologies and capacity constraints
(congestion pricing + revenue sharing)
Economic Mechanisms – Examples
+ p1
+ p2
p1+ p2
monitor marks and process
inter-network billing info
Jean Walrand – NSF – April 24-25, 2003 5/5
Research Issues Necessity of economics-networking synergy
Upgrades of networks require incentives Incentives necessitate economic mechanisms Economic mechanisms require protocols
Design of protocols that are flexible Support different economic models
Suitable mechanisms Impact on industry structure
Implementation considerations Are overlays desirable? Security
Economic Mechanisms – Research Issues
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