Reprinted from Telecommunications Policy, Vol. 20, No. 3, S. Shenker, D. Clark, D. Estrin, and S. Herzog, "Pricing in Computer Networks: Reshaping the Research Agenda", pages 183-201, Copyright 1996, with permission from Elsevier Science, Ltd., The Boulevard, Langford Lane, Kidlington 0X5 1GB, UK Pricing in Computer Networks: Reshaping the Research Agenda S. Shenker Xerox PARC shenker@parc, xerox, corn D. Clark MIT ddc@lcs, mit. edu D. Estrin USC/ISI estrin@usc, edu S. Herzog USC/ISI herzog@isi, edu Abstract As the Internet makes the transition from research testbed to commercial enterprise, the topic of pricing in computer networks has suddenly attracted great attention. Much of the discussion in the network design community and the popular press centers on the usage-based vs. fiat pricing debate. The more academic literature has largely focused on devising optimal pricing policies; achieving optimal welfare requires charging marginal congestion costs for usage. In this paper we critique this optimality paradigm on three grounds: (1) marginal cost prices may not produce sufficient revenue to fully recover costs and so are perhaps of limited relevance, (2) congestion costs are inherently inaccessible to the network and so cannot reliably form the basis for pricing, and (3) there are other, more structural,
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Pricing in computer networks: reshaping the research agenda
Shenker, S.; Clark, D.; Estrin, D.; Herzog, S.
Follow ACM SIGCOMM Computer Communication Review
, Volume 26 (2)
Association for Computing Machinery – Apr 15, 1996
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