Usage‐Based Pricing Differentiation for Communication Networks: Incomplete Information and Limited Pricing Choices

1Pricing is important for the design, operation, and management of communication networks. Pricing has been used with two different meanings in the area of communication networks. One is the “optimization-oriented” pricing for network resource allocation: it is made popular by Kelly’s seminal work on network congestion control [2, 3]. For example, the Transmission Control Protocol (TCP) has been successfully reverse-engineered as a congestion pricing based solution to a network optimization problem [4,5]. A more general framework of Network Utility Maximization (NUM) was subsequently developed to forward-engineer many new network protocols (see a recent survey in [6]). In various NUM formulations, the “optimization-oriented”

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