Price of simplicity under congestion

Dongmyung Lee, Jeonghoon Mo, Guang Jin, Jinwoo Park

Research output: Contribution to journalArticle

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 Dec 4

All Science Journal Classification (ASJC) codes

  • Computer Networks and Communications
  • Electrical and Electronic Engineering

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