DiffServ pricing games in multi-class queueing network models

Abstract

Introduction of differentiated services on the Internet has failed primarily due to many economic impediments. We focus on the provider competition aspect, and develop a multi-class queueing network game framework to study it. Each network service provider is modeled as a single-server multi-class queue. Providers post prices for various service classes. Traffic is elastic and there are multiple types of it, each traffic-type is sensitive to a different degree to Quality of Service (QoS). Arriving users choose a provider and a class for service. We study the pricing and service competition between the providers in a game-theoretic setting. We provide sufficient conditions for the existence of Nash equilibrium in the Bertrand (pricing) game between the multi-class queueing service providers. We also characterize the inefficiency (price of anarchy) due to strategic DiffServ pricing.