Efficient Allocation of the Internet Resources and Its Pricing
M. Takashima · Institutional Repositories DataBase (IRDB) · 1999
OVERVIEWWith the use of the Internet being rapidly proliferated among people, congestions in transmission lines and other facilities and delays in communications have brought the topics of efficient ulilization of network resources and consumers' welfare to great concerns of economists in the field of telecommunications-related problems.This paper discusses the relation of congestion pricing with the welfare of the Internet society with the use of a model of a basic network structure characterized by hierarchical connection between backbone and service providers, and shows that the pricing scheme internalizing adverse effects of externalities on network can lead to the optimal allocation and utilization of the resources in realizing the maximal social welfare in this layered structure run by a co-operative agent and can be complied with economic behaviors of both users and providers of the Internet services in competitive circumstances as well.1.