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Pricing in Computer Networks: Reshaping the Research Agenda (1996)
| Venue: | ACM Computer Communication Review |
| Citations: | 236 - 2 self |
BibTeX
@TECHREPORT{Shenker96pricingin,
author = {S. Shenker and D. Clark and D. Estrin and S. Herzog},
title = {Pricing in Computer Networks: Reshaping the Research Agenda},
institution = {ACM Computer Communication Review},
year = {1996}
}
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Abstract
As the Internet makes the transition from research testbed to commercial enterprise, the topic of pricing in computer networks has suddenly attracted great attention. Much of the discussion in the network design community and the popular press centers on the usage-based vs. fiat pricing debate. The more academic literature has largely focused on devising optimal pricing policies; achieving optimal welfare requires charging marginal congestion costs for usage. In this paper we critique this optimality paradigm on three grounds: (1) marginal cost prices may not produce sufficient revenue to fully recover costs and so are perhaps of limited relevance, (2) congestion costs are inherently inaccessible to the network and so cannot reliably form the basis for pricing, and (3) there are other, more structural, goals besides optimality, and some of these goals are incompatible with the global uniformity required for optimal pricing schemes. For these reasons, we contend that the research agenda on pricing in computer network should shift away from the optimality paradigm and focus more on structural and architectural issues. Such issues include allowing local control of pricing policies,
Keyphrases
computer network research agenda optimality paradigm optimal pricing policy academic literature optimal pricing scheme optimal welfare global uniformity network design community great attention architectural issue popular press center sufficient revenue local control usage-based v limited relevance congestion cost marginal cost price marginal congestion cost fiat pricing debate commercial enterprise
