Paying for QoS: An optimal distributed algorithm for pricing network resources

Network applications require certain individual performance guarantees that can be provided if enough network resources are available. Consequently, contention for the limited network resources may occur. For this reason, networks use flow control to manage network resources fairly and efficiently. This paper presents a distributed microeconomic flow control technique, that models the network as competitive markets. In these markets switches price their link bandwidth based on supply and demand, and users purchase bandwidth so as to maximize their individual Quality of Service (QoS). This yields a decentralized flow control method that provides a Pareto optimal bandwidth distribution and high utilization (over 90% in simulation results). Discussions about stability and Pareto optimal distribution are given as well as simulation results using actual MPEG-compressed video traffic.