Usage-based Pricing in Network Service
Bo Chen · Yunchou yu guanli · 2005
This paper analyzes the public goods in the network service sharing bandwidth, shows that the leader-follower game between users and ISP both result in congestion, and then verifies the usage-based pricing is more adaptable to controling the congestion than flat-rate pricing. Thus under usage-based pricing, in the monopoly market the maximum social welfare can't be accomplished; competitions between ISPs bring the improvement of users'utility; while the price under which the maximum social welfare is accomplished is a shadow price.