Price Competition with Elastic Traffic and Multiple User Classes

摘要

In this paper, we present a combined study of price competition and traffic control in a congested network. We study a model in which service providers own the routes in a network and set prices to maximize their profits, while users choose the amount of flow to send and the routing of the flow according to Wardrop's principle. Under mild assumptions on the utility functions, we characterize a tight bound of 2/3 on efficiency in pure strategy equilibria of the price competition game. We obtain the same bound even when we assume that there is no fixed latency cost, i.e., the latency of a link at 0 flow is equal to 0. These bounds are tight even when the numbers of routes and service providers are arbitrarily large.