A model analysis of pricing and link bandwidth allocation in a multiple class-of-service network

In this paper, an analytical model is developed for the study of the impact of user behavior on the effectiveness of pricing, service quality, and link bandwidth allocation/sharing in a multiple class-of-service Internet. The model characterizes a variety of user behaviors, such as user sensitivity to service price/quality and user migration from one class of service to another. It also incorporates a usage-based pricing scheme and a general trunk reservation policy. In particular, a three-tier service model for a single link is considered. Numerical studies reveal the richness of this research issue and provide insights into the optimum selection of service price, quality and trunk reservation values with given user behaviors. We find that trunk reservation is effective in terms of service protection only when the call migration effect is small and the call migration effect can be harnessed by a proper design of service pricing/quality structure. We also find that user sensitivities have great impact on service price/quality structure design and care must be taken to avoid sudden network performance degradation at certain price/quality parameter values.