Congestion pricing by priority auction

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

Research output: Chapter in Book/Report/Conference proceedingChapter


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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  • Cite this

    Zhang, G., He, J., Ma, Y., Cheng, W., & Yang, Z. (2005). Congestion pricing by priority auction. In S. J. B. Yoo, G-K. Chang, G. Li, & K. Cheung (Eds.), Network architectures, management, and applications II (pp. 1421-1428). (SPIE proceedings; Vol. 5626). Society of Photo-optical Instrumentation Engineers.