Incentive mechanisms for smoothing out a focused demand for network resources

We explore the problem of sharing network resources when users’ preferences lead to temporally concentrated loads, resulting in an inefficient use of the network. In such cases external incentives can be supplied to smooth out demand, obviating the need for expensive technological mechanisms. Taking a game-theoretic approach, we consider a setting in which bandwidth or access to service is available during different time slots at a fixed cost, but all agents have a natural preference for choosing the same time slot. We present four mechanisms that motivate users to distribute the load by probabilistically waiving the cost for each time slot, and analyze the equilibria that arise under these mechanisms. 1