On Optimal Tiered Structures for Network Service Bundles

Network operators offer a variety of tiered services in which users may select only from a small set of tiers which offer progressively higher levels of service. Service bundling, whereby several services are combined together and sold as a single package, is also common in the telecommunications market. We consider the problem of determining optimal tiering structures for service bundles using tools from economics and utility theory. Our work provides insight into the selection and pricing of Internet tiered services.