Dynamic pricing for network service: equilibrium and stability
Article Abstract:
A dynamic pricing model was developed to provide systems managers an efficient tool for allocating network resources, particularly in conditions where demand functions are unknown. Basically, the problem of determining the accurate value of network arises when systems fail to reach an equilibrium as a result of the oscillation between heavy congestion and near vacancy. To address such a problem, systems managers are encouraged to adopt a hybrid approach to adaptive and fixed pricing. Although this approach is limited to certain types of networks, it has been proven to alleviate instability problems associated with networking. Another alternative to addressing network problems is through the adoption of reroute schemes that allow certain classes of jobs to avoid unstable nodes.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1999
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Stability and chaos in input pricing for a service facility with adaptive customer response to congestion
Article Abstract:
The stability of the equilibrium arrival rate and equilibrium admission price at a service facility was investigated through a generalization of an input-pricing model presented by S. Dewan and H. Mendelson. The marginal value of service is similar as the admission price or the sum of the admission price and the expected delay cost, at the equilibrium point. Stability is attained when the system returns to the equilibrium after a disturbance. The discrete-time, dynamic-system pricing model of S. Stidham, Jr, was extended to permit adaptive expectations in which clients estimate the future price using a convex combination of the current price and the previous estimation. This was demonstrated to result to chaotic behavior when the equilibrium is unstable
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
Stability and chaos in input pricing for a service facility with adaptive customer response to congestion
Article Abstract:
The stability of the equilibrium arrival rate and equilibrium admission price at a service facility was analyzed through a generalization of an input-pricing model suggested by S. Dewan and H. Mendelson. The marginal value of service is the same as the admission price or the sum of the admission price and the expected delay cost, at the equilibrium point. Stability is attained when the system returns to the equilibrium after a disturbance. The discrete-time, dynamic-system pricing model of S. Stidham, Jr, was extended to permit adaptive expectations in which clients estimate the future price using a convex combination of the current price and the previous estimation. This was demonstrated to result to chaotic behavior when the equilibrium is unstable.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
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