A mathematical analysis of the cumulus pricing scheme

One important task in current and future communication networks is to define a suitable pricing scheme. It is then preferable to formulate a mathematical model, so that parameters will be optimized and important properties such as fairness or truthful anticipated load revelation (or incentive compatibility) will be verified. In this paper we study a simple and promising scheme called the cumulus pricing scheme, which can address service differentiation and scalability among other issues. Based on a mathematical model, we determine values for optimizing the provider s revenue, which happens under the constraint that each user has an incentive to reveal its anticipated load. This has led to a small variation of the initial model from the literature as in the modelling, cumulus points are translated into financial terms, and measurements induce a cost as well. 2004 Elsevier B.V. All rights reserved.