The role of pricing policies in multiple service class networks is studied. An abstract formulation of service disciplines and pricing policies that allows the interplay between service disciplines and pricing policies in determining overall network performance to be described more clearly is presented. Effective multiclass service disciplines allow networks to focus resources on performance-sensitive applications, while effective pricing policies allows the benefits of multiple service classes to be spread around to all users. Furthermore, the incentives formed by service disciplines and pricing policies must be carefully tuned so that user self-interest leads to optimal overall network performance. These concepts are illustrated through simulation of several simple example networks. It is found that it is possible to set the prices so that users of every application type are more satisfied with the combined cost and performance of a network with service-class-sensitive prices.>

We study the role of pricing policies in multiple service class networks. We argue that some form of graduated prices are required in order for any multiclass service discipline to have the desired effect. Moreover, we demonstrate through simulation that it is possible to set the prices so that every user is more satisfied with the combined cost and performance of a network with graduated prices. For some users the performance penalty received for requesting a less-than-optimal service class is offset by the reduced price of the service. For the other users the monetary penalty incurred by using the more expensive, higher quality service classes is offset by the improved performance they receive. Thus, prices allow us to spread the benefits of multiple service classes around to all users, rather than just having these benefits remain exclusively with users who are performance sensitive. 1 Introduction Recent research on computer networks has been concerned almost exclusively with the...