IDEAS home Printed from https://ideas.repec.org/a/spr/mathme/v64y2006i3p445-465.html
   My bibliography  Save this article

An Optimal Congestion and Cost-sharing Pricing Scheme for Multiclass Services

Author

Listed:
  • Yezekael Hayel
  • Bruno Tuffin

Abstract

We study in this paper a social welfare optimal congestion-pricing scheme for multiclass queuing services which can be applied to telecommunication networks. Most of the literature has focused on the marginal price. Unfortunately, it does not share the total cost among the different classes. We investigate here an optimal Aumann–Shapley congestion-price which verifies this property. We extend the work on the Aumann–Shapley price for priority services, based on the results on the marginal price: instead of just determining the cost repartition among classes for given rates, we obtain the rates and charges that optimize the social welfare. Copyright Springer-Verlag 2006

Suggested Citation

  • Yezekael Hayel & Bruno Tuffin, 2006. "An Optimal Congestion and Cost-sharing Pricing Scheme for Multiclass Services," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 64(3), pages 445-465, December.
  • Handle: RePEc:spr:mathme:v:64:y:2006:i:3:p:445-465
    DOI: 10.1007/s00186-006-0075-3
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s00186-006-0075-3
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1007/s00186-006-0075-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Leonard J. Mirman & Yair Tauman, 1982. "Demand Compatible Equitable Cost Sharing Prices," Mathematics of Operations Research, INFORMS, vol. 7(1), pages 40-56, February.
    2. Moshe Haviv & Ya'acov Ritov, 1998. "Externalities, Tangible Externalities, and Queue Disciplines," Management Science, INFORMS, vol. 44(6), pages 850-858, June.
    3. Sumita, Ushio & Masuda, Yasushi & Yamakawa, Shigetaka, 2001. "Optimal internal pricing and capacity planning for service facility with finite buffer," European Journal of Operational Research, Elsevier, vol. 128(1), pages 192-205, January.
    4. Yasushi Masuda & Seungjin Whang, 1999. "Dynamic Pricing for Network Service: Equilibrium and Stability," Management Science, INFORMS, vol. 45(6), pages 857-869, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Forgo, Ferenc & Szidarovszky, Ferenc, 1999. "On consistency of income and cost sharing," Socio-Economic Planning Sciences, Elsevier, vol. 33(3), pages 221-230, September.
    2. Yves Sprumont, 2010. "An Axiomatization of the Serial Cost-Sharing Method," Econometrica, Econometric Society, vol. 78(5), pages 1711-1748, September.
    3. Ginsburgh, Victor & Zang, Israël, 2012. "Shapley Ranking of Wines," Journal of Wine Economics, Cambridge University Press, vol. 7(2), pages 169-180, November.
    4. David Encaoua & Michel Moreaux, 1987. "L'analyse théorique des problèmes de tarification et d'allocation des coûts dans les télécommunications," Revue Économique, Programme National Persée, vol. 38(2), pages 375-414.
    5. Friedman, Eric & Moulin, Herve, 1999. "Three Methods to Share Joint Costs or Surplus," Journal of Economic Theory, Elsevier, vol. 87(2), pages 275-312, August.
    6. Hervé Moulin & Yves Sprumont, 2007. "Fair allocation of production externalities : recent results," Revue d'économie politique, Dalloz, vol. 117(1), pages 7-36.
    7. Hougaard, Jens Leth & Tind, Jørgen, 2009. "Cost allocation and convex data envelopment," European Journal of Operational Research, Elsevier, vol. 194(3), pages 939-947, May.
    8. Richard P. McLean & Amit Pazgal & William W. Sharkey, 2004. "Potential, Consistency, and Cost Allocation Prices," Mathematics of Operations Research, INFORMS, vol. 29(3), pages 602-623, August.
    9. Tsanakas, Andreas, 2009. "To split or not to split: Capital allocation with convex risk measures," Insurance: Mathematics and Economics, Elsevier, vol. 44(2), pages 268-277, April.
    10. Schauf, Andrew & Oh, Poong, 2021. "Myopic reallocation of extraction improves collective outcomes in networked common-pool resource games," SocArXiv w2cxp, Center for Open Science.
    11. Friedman, Eric J., 2012. "Asymmetric Cost Sharing mechanisms," Games and Economic Behavior, Elsevier, vol. 75(1), pages 139-151.
    12. Sagnika Sen & T. S. Raghu & Ajay Vinze, 2009. "Demand Heterogeneity in IT Infrastructure Services: Modeling and Evaluation of a Dynamic Approach to Defining Service Levels," Information Systems Research, INFORMS, vol. 20(2), pages 258-276, June.
    13. Neil Keon & G. “Anand” Anandalingam, 2005. "A New Pricing Model for Competitive Telecommunications Services Using Congestion Discounts," INFORMS Journal on Computing, INFORMS, vol. 17(2), pages 248-262, May.
    14. Albizuri, M.J. & Díez, H. & Sarachu, A., 2014. "Monotonicity and the Aumann–Shapley cost-sharing method in the discrete case," European Journal of Operational Research, Elsevier, vol. 238(2), pages 560-565.
    15. Kopp, Andreas, 2005. "Fairness, efficiency and the simultaneity of pricing and infrastructure capacity choice," European Transport \ Trasporti Europei, ISTIEE, Institute for the Study of Transport within the European Economic Integration, issue 31, pages 15-27.
    16. Baric{s} Ata & Shiri Shneorson, 2006. "Dynamic Control of an M/M/1 Service System with Adjustable Arrival and Service Rates," Management Science, INFORMS, vol. 52(11), pages 1778-1791, November.
    17. Moulin, Herve, 2005. "Split-Proof Probabilistic Scheduling," Working Papers 2004-06, Rice University, Department of Economics.
    18. Kartik Hosanagar & John Chuang & Ramayya Krishnan & Michael D. Smith, 2008. "Service Adoption and Pricing of Content Delivery Network (CDN) Services," Management Science, INFORMS, vol. 54(9), pages 1579-1593, September.
    19. Wang, Yun-Tong & Zhu, Daxin, 2002. "Ordinal proportional cost sharing," Journal of Mathematical Economics, Elsevier, vol. 37(3), pages 215-230, May.
    20. Moulin, Herve, 2002. "Axiomatic cost and surplus sharing," Handbook of Social Choice and Welfare, in: K. J. Arrow & A. K. Sen & K. Suzumura (ed.), Handbook of Social Choice and Welfare, edition 1, volume 1, chapter 6, pages 289-357, Elsevier.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:mathme:v:64:y:2006:i:3:p:445-465. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.