Networking

Revenue Maximization for Communication Networks With Usage-Based Pricing

Date Added: Nov 2010
Format: PDF

The authors study the optimal usage-based pricing problem in a resource-constrained network with one profit-maximizing Service Provider (SP) and multiple groups of surplus-maximizing users. With the assumption that the SP knows the utility function of each user (thus complete information), they find that the complete price differentiation scheme can achieve a large revenue gain (e.g., 50%) compared to no price differentiation, when the total network resource is comparably limited and the high willingness to pay users are minorities. However, the complete price differentiation scheme may lead to a high implementational complexity.