Analyzing the economic efficiency of resource allocation based on avoiding network congestion

The demand for network resource is adjust through the unit price of resource. When the demand of users is larger than Service Provider (SP)psilas supply, the price rises, users have to reduce their demand to maximize their utility, and then the network congestion will be relieved. The process of adjusting takes some time, the network will be in congestion state in that period of time. In order to avoid network congestion, SP can choose such strategy: when the demand is close, not equal, to the supply from the left, the price starts rising to prevent the increase of the demand, users reduce their demand before the occur of congestion. This method avoids congestion, but also results in the economic deficiency of resource allocation the earlier the price starts going up, the more the total utility of SP and uses falls. It is better that SP still rise the price after the congestion occurs, it is better the network is in low-grade congestion. Simulations are performed to verify the conclusion.