Dynamic pricing for network service: equilibrium and stability

Yasushi Masuda, Seungjin Whang

Research output: Contribution to journalArticle

52 Citations (Scopus)

Abstract

Consider a data communication network owned and operated by a single organization. The network has an infinite number of small users and is managed by a system manager (SM) whose objective is to maximize the net value of the system as a whole. The objective of this paper is to study pricing mechanisms that induce the optimal arrival rates when the SM has no full knowledge of the demand in advance. We investigate the system behavior under three alternative dynamic pricing rules and users' expectations models, and characterize the equilibrium and its stability conditions.

Original languageEnglish
Pages (from-to)857-869
Number of pages13
JournalManagement Science
Volume45
Issue number6
DOIs
Publication statusPublished - 1999 Jun
Externally publishedYes

ASJC Scopus subject areas

  • Strategy and Management
  • Management Science and Operations Research

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