Pricing and Forwarding Games for Inter-domain Routing

We address the question of strategic pricing of interdomain traffic forwarding services provided by ISPs, which is also closely coupled with the question of how ISPs route their traffic towards their neighboring ISPs. Posing this question as a non-cooperative game between neighboring ISPs, we study the properties of this pricing game in terms of the existence, computability, and efficiency of the equilibrium. We observe that for “well-provisioned” ISPs, Nash equilibrium prices exist and they result in flows that maximize the overall network utility (generalized end-to-end throughput). For general ISP topologies, equilibrium prices may not exist; however, simulations on a large number of realistic topologies show that best-response based simple price update solutions converge to stable and efficient prices and flows for most topologies. Since our model follows a destination-specific, next-hop routing framework, these solutions can be useful for pricing-based inter-domain traffic engineering, requiring modest changes to existing path-vector inter-domain routing protocols that are used in the current Internet.