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Price Discovery at Network Edges G. S. Arora, M. Yuksel, S. Kalyanaraman, T. Ravichandran and A. Gupta Rensselaer Polytechnic Institute, Troy, NY

Price Discovery at Network Edges

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Price Discovery at Network Edges. G. S. Arora, M. Yuksel, S. Kalyanaraman, T. Ravichandran and A. Gupta Rensselaer Polytechnic Institute, Troy, NY. Overview. Motivation Edge-to-Edge Concepts Price Discovery Framework Pricing Schemes Simulations Summary. Motivation. - PowerPoint PPT Presentation

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Page 1: Price Discovery at  Network Edges

Price Discovery at Network Edges

G. S. Arora, M. Yuksel, S. Kalyanaraman,

T. Ravichandran and A. Gupta

Rensselaer Polytechnic Institute, Troy, NY

Page 2: Price Discovery at  Network Edges

SPECTS 2002

Overview Motivation Edge-to-Edge Concepts Price Discovery Framework Pricing Schemes Simulations Summary

Page 3: Price Discovery at  Network Edges

SPECTS 2002

Motivation Need for new economic models Adaptive, particularly congestion, pricing is

necessary Implementation problems need to be

solved: Upgrades should be limited Administrative access is necessary

Can we do it only at network edges?

Page 4: Price Discovery at  Network Edges

SPECTS 2002

Edge-to-Edge Concepts

A generic view and the trend for the Internet. Administrative access is available at edges. So, possible to coordinate ingress and egress edge

stations. A more complex version of Clark’s Edge Pricing is

possible..

Page 5: Price Discovery at  Network Edges

SPECTS 2002

Price Discovery Framework Given edge-to-edge coordination, estimate

edge-to-edge capacity . Congestion pricing Pricing of edge

queue . Severity of congestion is the ratio . Is this ratio really a good parameter?

Formulate objective function Regression analysis for unknown variables of

the objective function

iC

1iq

ii Cq /1

Page 6: Price Discovery at  Network Edges

SPECTS 2002

Price Discovery Framework (cont’d) Let there be k observations in a contract period. User adaptation:

Actual spent budget for user with reservation price :p̂

Page 7: Price Discovery at  Network Edges

SPECTS 2002

Price Discovery Framework (cont’d) Objective: Minimize non-utilized capacity while

keeping edge queue less than a pre-defined value .

Formulation:

subject to

maxq

Page 8: Price Discovery at  Network Edges

SPECTS 2002

Price Discovery Framework (cont’d) Other than Bk everything else is known.

For k=1000, qmax=50, Ck ~ N(98,2) truncated in the range [96,100]: Regression analysis for Bk ~ U(20,50) and Bk ~

U(30,150) verified that qi/Ci,mean is strongly associated with optimal price pi

*.

So, we can use the predictor qi/Ci,mean to determine pi in adaptive pricing at the edge.

Page 9: Price Discovery at  Network Edges

SPECTS 2002

Pricing Schemes Assuming that ISP wants to keep edge queue in the

range [ql, qh]. Proportional Increase Proportional Decrease (PIPD):

Proportional Increase Additive Decrease (PIAD):

Page 10: Price Discovery at  Network Edges

SPECTS 2002

Pricing Schemes (cont’d) Additive Increase Additive Decrease (AIAD):

Additive Increase Proportional Decrease (AIPD):

Page 11: Price Discovery at  Network Edges

SPECTS 2002

Simulations

Define user demand according to reservation price and :

Initial parameters: Step increase in demand: In times (50, 100), i.e.

Page 12: Price Discovery at  Network Edges

SPECTS 2002

Simulations (cont’d)

Page 13: Price Discovery at  Network Edges

SPECTS 2002

Simulations (cont’d)

Page 14: Price Discovery at  Network Edges

SPECTS 2002

Simulations (cont’d)

PIPD and PIAD performs significantly better than AIPD and AIAD.

Compared to PIPD, PIAD has less variation in price but utilization is slightly less too.

So, the best one is either PIAD or PIPD, depending on value of utilization.

Page 15: Price Discovery at  Network Edges

SPECTS 2002

Simulations (cont’d) Investigated effect of several parameters

on PIAD performance.

We run two users with different and reservation prices:

=

Page 16: Price Discovery at  Network Edges

SPECTS 2002

Simulations (cont’d)

Page 17: Price Discovery at  Network Edges

SPECTS 2002

Summary Adaptive (particularly congestion) pricing

is necessary for enabling better economic models.

Price Discovery: Deployable over diff-serv Possible to implement congestion pricing at

edges Possible to develop variety of pricing

schemes: PIPD, PIAD, AIPD, AIAD.