A comparison of auction and flat pricing for differentiated service networks

In a network with quality of service (QoS) support, pricing is an effective means of dealing with congestion control and revenue generation. In the Internet, the needs of the customers and their applications are constantly evolving. An auction based algorithm is the best choice for this environment because it needs minimal a priori information. In this paper, we propose an auction based pricing algorithm which lets customers choose the price as well as the services required, and in which the service provider decides on the admission price threshold and the service level of the differentiated service provided. We then investigate the system´s adaptive behavior by simulating it in various environments and situations.