Pricing is important for the design, operation, and management of communication networks. Pricing has been used with two different meanings in the area of communication networks. One is the “optimization-oriented” pricing for network resource allocation: it is made popular by Kelly’s seminal work on network congestion control. The Transmission Control Protocol (TCP) has been successfully reverseengineered as a congestion pricing based solution to a network optimization problem . A more general framework of Network Utility Maximization (NUM) was subsequently developed to forward-engineer many new network protocols. In various NUM formulations, the “optimization-oriented” prices often represent the Lagrangian multipliers of various resource constraints and are used to coordinate different network entities to achieve the maximum system performance in a distributed fashion. The other is the “economics-based” pricing, which is used by a network service provider to various objectives including revenue maximization. The proper design of such a pricing becomes particularly challenging today due to the exponential growth of data volume and applications in both wireline and wireless networks. In this paper, we focus on studying the “economics-based” pricing schemes for managing communication networks. Economists have proposed many sophisticated pricing mechanisms to extract surpluses from the consumers and maximize revenue (or profits) for the providers. A typical example is the optimal nonlinear pricing . In practice, we often observe simple pricing schemes deployed by the service providers.
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