Congestion pricing by priority auction

Guanxiang Zhang, Jianhua He, Yajie Ma, Wenqing Cheng, Zongkai Yang

    Research output: Chapter in Book/Report/Conference proceedingChapter

    1 Citation (Scopus)


    This paper analyzes a communication network facing users with a continuous distribution of delay cost per unit time. Priority queueing is often used as a way to provide differential services for users with different delay sensitivities. Delay is a key dimension of network service quality, so priority is a valuable resource which is limited and should to be optimally allocated. We investigate the allocation of priority in queues via a simple bidding mechanism. In our mechanism, arriving users can decide not to enter the network at all or submit an announced delay sensitive value. User entering the network obtains priority over all users who make lower bids, and is charged by a payment function which is designed following an exclusion compensation principle. The payment function is proved to be incentive compatible, so the equilibrium bidding behavior leads to the implementation of "c?-rule". Social warfare or revenue maximizing by appropriately setting the reserve payment is also analyzed.
    Original languageEnglish
    Title of host publicationNetwork architectures, management, and applications II
    EditorsS.J. Ben Yoo, Gee-Kung Chang, Guangcheng Li, Kwok-wai Cheung
    Place of PublicationBellingham, WA (US)
    PublisherSociety of Photo-optical Instrumentation Engineers
    Number of pages8
    Publication statusPublished - 2005
    EventProceedings of SPIE: Network Architectures, Management, and Applications II - Beijing, China
    Duration: 9 Nov 200410 Nov 2004

    Publication series

    NameSPIE proceedings
    ISSN (Print)0277-786X


    ConferenceProceedings of SPIE


    • Priority
    • Pricing
    • Auction
    • Payment function


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