Abstract

Abstract — Consider a set of connections sharing a network node under an allocation scheme that pro-vides each connection with a fixed minimum and a random extra amount of bandwidth and buffer. Allocations and prices are adjusted to adapt to re-source availability y and user demands. We consider two scenarios of user behavior. In the first scenario a connection purchases an allocation to maximize its expected utility in such a way that the resource cost of the new allocation, and hence its connec-tion charge, remains the same as that for the old allocation. In the second scenario this budget con-straint is relaxed and a connection tries to maxi-mize its benefit, expected utility minus the resource cost. Equilibrium is achieved when all connections ach]eve their optimality and demand equals sup-ply for non-free resources. We show that at equi-librium expected return on purchasing variable re-sources can be higher than that on fixed resources. Thus connections must balance the marginal in-crease in utility due to higher return on variable resources and the marginal decrease in utility due to their variability. We further show that in equi-librium where such tradeoff is optimized all con-nections hold strictly positive amounts of variable bandwidth and bufer. I.

Citations