Price of simplicity under congestion

Dongmyung Lee, Jeonghoon Mo, Guang Jin, Jinwoo Park

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)

Abstract

In this paper, we consider revenues of the NSP (network service provider) when there exists a "congestion externality." In particular, we compare revenues obtained using a flat price and two-part tariff and analyze the effect of congestion on the revenue loss when using a simple entry fee in lieu of the two-part tariff. Previous study has shown that when there is no delay disutility the revenue loss is small, which leads to a low "Price of Simplicity." However, in this study, we show that in an extreme case where all users are identical, the price of simplicity is substantial. Then we consider a more practical scenario where users have different preferences, and show that even in this case, under congestion externality, the price can be extremely high.

Original languageEnglish
Article number6354274
Pages (from-to)2158-2168
Number of pages11
JournalIEEE Journal on Selected Areas in Communications
Volume30
Issue number11
DOIs
Publication statusPublished - 2012

Bibliographical note

Funding Information:
Manuscript received 15 December 2011; revised 31 May 2012. This research was supported by the National Research Foundation of Korea (NRF) grant funded by the Korea government (MEST) (No. 2012R1A1A2007890), and ASRI, SNU. D. Lee and J. Park are with the Department of Industrial Engineering, Seoul National University, South Korea (e-mail: {leoleo333,autofact}@snu.ac.kr). J. Mo is with the Department of Information and Industrial Engineering, Yonsei University, South Korea (e-mail: j.mo@yonsei.ac.kr). Corresponding author. G. Jin is with Highbrow Inc., Korea (e-mail: kimgwang@yonsei.ac.kr). Digital Object Identifier 10.1109/JSAC.2012.121208.

All Science Journal Classification (ASJC) codes

  • Computer Networks and Communications
  • Electrical and Electronic Engineering

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