Dynamic pricing of network resources

Differentiated services and integrated services architectures rely on mechanisms to dynamically allocate network resources. Here, we investigate the feasibility of dynamically adjusting prices based on congestion. The pricing policy implements a distributed resource allocation to provide guaranteed bounds on packet loss and end-to-end delay for real-time applications. Distributed pricing roles are assigned to each user, each network node, and an arbitrager in between the user and the network. We find that such dynamic pricing can be accomplished using simple gradient algorithms, but that this approach requires a small amount of steady communication about demand and supply along each route.