Dynamic pricing and resource allocation using revenue management for communications networks

In this paper we develop a novel single-link multiple-classes-of-service framework where offered prices and QoS are allowed to be actively modified by the provider, depending on the demand and the congestion of the system. We obtain a solution to the problem using dynamic programming. The obtained solution is then extended to a network environment using a decomposition approach. The decomposition approach makes our solution scalable, since single-link solutions are used and minimal amount of information is explicitly exchanged. Assessments carried out for small networks show that the obtained income is improved between 2%-20% when compared to a static approach and to approaches where only price or only quality are allowed to be adaptive.