Open Access
2003 Combination Exchange Mechanisms for Efficient Bandwidth Allocation
Rahul Jain, Pravin P. Varaiya
Commun. Inf. Syst. 3(4): 305-324 (2003).


The size, scale and multiple ownership of communication network resources makes it important to consider an economic framework wherein we can investigate the efficiency of network operation taking agents' incentives into account. Such a framework has been considered in the design and analysis of pricing mechanisms to regulate congestion and share bandwidth over short time scales. We consider time scales of a few months over which owners of communication links lease bandwidth to network service providers. As is well-known, economic efficiency is related to how close an allocation is to a competitive equilibrium. We first show that achieving economic efficiency through a market mechanism depends on network topology. We then show that in finite networks a competitive equilibrium may not exist. But a competitive equilibrium does exist in an idealized continuum model, in which all agents are infinitesimal compared with the size of the network. This suggests that approximate competitive equilibria with good performance may be attainable in real networks. We finally introduce a market mechanism called the combinatorial seller's bid double auction whose outcome, in the continuum model, is a competitive equilibrium.


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Rahul Jain. Pravin P. Varaiya. "Combination Exchange Mechanisms for Efficient Bandwidth Allocation." Commun. Inf. Syst. 3 (4) 305 - 324, 2003.


Published: 2003
First available in Project Euclid: 24 June 2005

zbMATH: 1087.90502
MathSciNet: MR2132042

Rights: Copyright © 2003 International Press of Boston

Vol.3 • No. 4 • 2003
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