1. Jean Walrand – NSF – April 24-25, 20031/5 Economic Mechanisms Grand Challenge: Design economic mechanisms that provide incentives for increasing the utility of the network Motivation Features Example Research Issues Economic Mechanisms Joint work with Jörn Altmann & Linhai He

2. Jean Walrand – NSF – April 24-25, 20032/5 Motivation Different application requirements  Enable new applications  higher revenues Different user utilities  Enable market segmentation  higher revenues More flexible economic arrangements  800-service, third party billing, … Various players get fair share of revenues  Incentive for improved services  Flexible peering agreements Economic Mechanisms – Motivation End-users / Enterprises Content Service Providers Resource Service Providers Network Planning and Management Technology Economics Data Collection Resource Pricing Business Relationship Data Collection Data Collection Service Provider Ecosystem Stakeholder Economically Efficient Resource Allocation Revenues Service Quality increases improve

3. Jean Walrand – NSF – April 24-25, 20033/5 Desirable Features of E.M. Everybody is a player  Not simply social maximization Designed for multi-provider and multi-business environment  Heterogeneous Incentive-compatible  Don’t assume altruism Scalable  12,000+ ASes Flexible: Support different service types  Dependable service, variable price  Dependable price, variable service Catalyst for ecology  Network; Storage; Distribution; Contents; … Economic Mechanisms – Features

4. Jean Walrand – NSF – April 24-25, 20034/5 Example Simple protocol at call set up time Game between providers and users Can be designed for dependable service  Price controls utilization Analysis shows that  In tandem network with at least 3 providers  If demand is the constraint Cooperation > Nash > Stackleberg  Suggests charging protocol Ideas extend to complex topologies and capacity constraints (congestion pricing + revenue sharing) Economic Mechanisms – Examples + p 1 + p 2 p1+ p2p1+ p2 monitor marks and process inter-network billing info

5. Jean Walrand – NSF – April 24-25, 20035/5 Research Issues Necessity of economics-networking synergy  Upgrades of networks require incentives  Incentives necessitate economic mechanisms  Economic mechanisms require protocols Design of protocols that are flexible  Support different economic models Suitable mechanisms  Impact on industry structure Implementation considerations  Are overlays desirable?  Security Economic Mechanisms – Research Issues