Pricing of buffer and bandwidth in a reservation-based QoS architecture

We consider resource allocation policies to guarantee bounds on packet loss and end-to-end delay for real-time applications in a network with a reservation-based QoS architecture. We consider using pricing to distribute the allocation of buffer and bandwidth at each node along a set of paths, with the goal of maximizing the total utility of all users in the network. Each user is modelled as an aggregate of flows with similar traffic characterizations and similar utility functions, and utility is assumed to be a function of loss probability, which in turn depends on the reserved buffer and bandwidth at each node. We show that this optimization problem has a unique solution, and that the corresponding shadow costs associated with each resource and delay constraint can be related to user´s marginal utilities. We propose distributed pricing implementations to achieve the optimal resource reservation policy, by assigning individual roles to the users and to the network, and perhaps to an intervening arbitrager layer. We prove that an allocation is optimal if all users, arbitragers, and the network are in equilibrium.