Market Pricing of Differentiated Internet Services

This paper presents a decentralized auction-based approach to pricing of edge-allocatedbandwidth in a di#erentiated services model for the Internet. The players in this architectureare users, one raw-capacity seller per network and one broker per serviceper network. With the Progressive Second Price auction mechanism as the basic building block, we conduct a game theoretic analysis, deriving optimal strategies for buyers and brokers, and show the existence of network-wide equilibria. We investigate the system dynamics by simulating a scenario with three interconnected networks, and two types of services built on the proposed standard expedited forwarding #EF# and assured forwarding #AF# per-hop-behaviors