Please use this identifier to cite or link to this item: https://doi.org/10.1109/TNET.2018.2874474
Title: On Optimal Service Differentiation in Congested Network Markets
Authors: Zou, Mao
Ma Tianbai 
WANG XIN 
Xu, Yinlong
Keywords: Science & Technology
Technology
Computer Science, Hardware & Architecture
Computer Science, Theory & Methods
Engineering, Electrical & Electronic
Telecommunications
Computer Science
Engineering
Service differentiation
optimal control
network congestion
MONOPOLY
PRICE
Issue Date: 1-Dec-2018
Publisher: IEEE-INST ELECTRICAL ELECTRONICS ENGINEERS INC
Citation: Zou, Mao, Ma Tianbai, WANG XIN, Xu, Yinlong (2018-12-01). On Optimal Service Differentiation in Congested Network Markets 26 (6) : 2693-2706. ScholarBank@NUS Repository. https://doi.org/10.1109/TNET.2018.2874474
Abstract: © 1993-2012 IEEE. As Internet applications have become more diverse in recent years, users having heavy demand for online video services are more willing to pay higher prices for better services than light users that mainly use e-mails and instant messages. This encourages the Internet service providers (ISPs) to explore service differentiation so as to optimize their profits and allocation of network resources. Much prior work has focused on the viability of network service differentiation by comparing with the case of a single-class service. However, the optimal service differentiation for an ISP subject to resource constraints has remained unsolved. In this paper, we establish an optimal control framework to derive the analytical solution to an ISP's optimal service differentiation, i.e., the optimal service qualities and associated prices. By analyzing the structures of the solution, we reveal how an ISP should adjust the service qualities and prices in order to meet varying capacity constraints and users' characteristics. We also obtain the conditions under which ISPs have strong incentives to implement service differentiation and whether regulators should encourage such practices.
URI: https://scholarbank.nus.edu.sg/handle/10635/156947
ISBN: 9781509053360
ISSN: 1063-6692
1558-2566
DOI: 10.1109/TNET.2018.2874474
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