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In this paper, we analyzed the impacts of the Paris Metro Pricing (PMP) strategy that differentiates network services with price discrimination. We develop simple analytical models for both single flat pricing and the PMP pricing schemes to compare them for various user distributions. The comparison shows that 1) PMP increases the monopoly operator's revenue for various user distribution, and that 2) PMP also increases user subscription ratio.
Date of Conference: 26-28 Jan. 2011