Abstract
Interval pricing can provide an effective means of congestion control as well as revenue generation. Using this method, prices are fixed over intervals of time, providing adaptability and predictability. An important issue is the interval duration associated with price updates. While previous research has discussed the effect of interval lengths on congestion control, this paper investigates the economic impact of price interval duration. Smaller intervals yield higher profits since prices are more responsive to changing demands. However, experimental results indicate only a modest profit gain (no more than 5%) is achieved when smaller intervals are used as opposed to larger intervals (for example 100 times longer). Given users preferences toward fewer price changes, smaller price intervals may hold few economic benefits.
This work was supported by AFOSR contract F49620-99-1-0264 and DARPA contract F30602-99-1-0540. The views and conclusions contained herein are those of the authors and should not be interpreted as necessarily representing the official policies or endorsements, either expressed or implied, of the AFOSR, DARPA, or the U.S. Government.
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Fulp, E.W., Reeves, D.S. (2002). The Economic Impact of Network Pricing Intervals. In: Stiller, B., Smirnow, M., Karsten, M., Reichl, P. (eds) From QoS Provisioning to QoS Charging. QofIS ICQT 2002 2002. Lecture Notes in Computer Science, vol 2511. Springer, Berlin, Heidelberg. https://doi.org/10.1007/3-540-45859-X_30
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DOI: https://doi.org/10.1007/3-540-45859-X_30
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