Incentive Mechanisms for Internet Congestion Management: Fixed-Budget Rebate Versus Time-of-Day Pricing
Mobile data traffic has been steadily rising in the past years. This has generated a significant interest in the deployment of incentive mechanisms to reduce peak-time congestion. Typically, the design of these mechanisms requires information about user demand and sensitivity to prices. Such informa...
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| Format: | Article |
| Language: | en_US |
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Institute of Electrical and Electronics Engineers (IEEE)
2014
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| Online Access: | http://hdl.handle.net/1721.1/89046 https://orcid.org/0000-0003-1554-015X |
| _version_ | 1811090380569968640 |
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| author | Loiseau, Patrick Schwartz, Galina Musacchio, John Amin, Saurabh Sastry, S. Shankar |
| author2 | Massachusetts Institute of Technology. Department of Civil and Environmental Engineering |
| author_facet | Massachusetts Institute of Technology. Department of Civil and Environmental Engineering Loiseau, Patrick Schwartz, Galina Musacchio, John Amin, Saurabh Sastry, S. Shankar |
| author_sort | Loiseau, Patrick |
| collection | MIT |
| description | Mobile data traffic has been steadily rising in the past years. This has generated a significant interest in the deployment of incentive mechanisms to reduce peak-time congestion. Typically, the design of these mechanisms requires information about user demand and sensitivity to prices. Such information is naturally imperfect. In this paper, we propose a fixed-budget rebate mechanism that gives each user a reward proportional to his percentage contribution to the aggregate reduction in peak-time demand. For comparison, we also study a time-of-day pricing mechanism that gives each user a fixed reward per unit reduction of his peak-time demand. To evaluate the two mechanisms, we introduce a game-theoretic model that captures the public good nature of decongestion. For each mechanism, we demonstrate that the socially optimal level of decongestion is achievable for a specific choice of the mechanism's parameter. We then investigate how imperfect information about user demand affects the mechanisms' effectiveness. From our results, the fixed-budget rebate pricing is more robust when the users' sensitivity to congestion is “sufficiently” convex. This feature of the fixed-budget rebate mechanism is attractive for many situations of interest and is driven by its closed-loop property, i.e., the unit reward decreases as the peak-time demand decreases. |
| first_indexed | 2024-09-23T14:44:42Z |
| format | Article |
| id | mit-1721.1/89046 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T14:44:42Z |
| publishDate | 2014 |
| publisher | Institute of Electrical and Electronics Engineers (IEEE) |
| record_format | dspace |
| spelling | mit-1721.1/890462022-09-29T10:16:47Z Incentive Mechanisms for Internet Congestion Management: Fixed-Budget Rebate Versus Time-of-Day Pricing Loiseau, Patrick Schwartz, Galina Musacchio, John Amin, Saurabh Sastry, S. Shankar Massachusetts Institute of Technology. Department of Civil and Environmental Engineering Amin, Saurabh Mobile data traffic has been steadily rising in the past years. This has generated a significant interest in the deployment of incentive mechanisms to reduce peak-time congestion. Typically, the design of these mechanisms requires information about user demand and sensitivity to prices. Such information is naturally imperfect. In this paper, we propose a fixed-budget rebate mechanism that gives each user a reward proportional to his percentage contribution to the aggregate reduction in peak-time demand. For comparison, we also study a time-of-day pricing mechanism that gives each user a fixed reward per unit reduction of his peak-time demand. To evaluate the two mechanisms, we introduce a game-theoretic model that captures the public good nature of decongestion. For each mechanism, we demonstrate that the socially optimal level of decongestion is achievable for a specific choice of the mechanism's parameter. We then investigate how imperfect information about user demand affects the mechanisms' effectiveness. From our results, the fixed-budget rebate pricing is more robust when the users' sensitivity to congestion is “sufficiently” convex. This feature of the fixed-budget rebate mechanism is attractive for many situations of interest and is driven by its closed-loop property, i.e., the unit reward decreases as the peak-time demand decreases. National Science Foundation (U.S.) (Grant CNS-1239166) National Science Foundation (U.S.) (Grant CNS-0910711) National Science Foundation (U.S.) (CCF-0424422) United States. Air Force Office of Scientific Research (FA9550-06-1-0244) 2014-08-26T12:31:10Z 2014-08-26T12:31:10Z 2014-04 2013-01 Article http://purl.org/eprint/type/JournalArticle 1063-6692 1558-2566 http://hdl.handle.net/1721.1/89046 Loiseau, Patrick, Galina Schwartz, John Musacchio, Saurabh Amin, and S. Shankar Sastry. “Incentive Mechanisms for Internet Congestion Management: Fixed-Budget Rebate Versus Time-of-Day Pricing.” IEEE/ACM Transactions on Networking 22, no. 2 (April 2014): 647–661. https://orcid.org/0000-0003-1554-015X en_US http://dx.doi.org/10.1109/TNET.2013.2270442 IEEE/ACM Transactions on Networking Creative Commons Attribution-Noncommercial-Share Alike http://creativecommons.org/licenses/by-nc-sa/4.0/ application/pdf Institute of Electrical and Electronics Engineers (IEEE) arXiv |
| spellingShingle | Loiseau, Patrick Schwartz, Galina Musacchio, John Amin, Saurabh Sastry, S. Shankar Incentive Mechanisms for Internet Congestion Management: Fixed-Budget Rebate Versus Time-of-Day Pricing |
| title | Incentive Mechanisms for Internet Congestion Management: Fixed-Budget Rebate Versus Time-of-Day Pricing |
| title_full | Incentive Mechanisms for Internet Congestion Management: Fixed-Budget Rebate Versus Time-of-Day Pricing |
| title_fullStr | Incentive Mechanisms for Internet Congestion Management: Fixed-Budget Rebate Versus Time-of-Day Pricing |
| title_full_unstemmed | Incentive Mechanisms for Internet Congestion Management: Fixed-Budget Rebate Versus Time-of-Day Pricing |
| title_short | Incentive Mechanisms for Internet Congestion Management: Fixed-Budget Rebate Versus Time-of-Day Pricing |
| title_sort | incentive mechanisms for internet congestion management fixed budget rebate versus time of day pricing |
| url | http://hdl.handle.net/1721.1/89046 https://orcid.org/0000-0003-1554-015X |
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