Abstract-In this paper, we present a game theoretic framework for bandwidth allocation for elastic services in high-speed networks. The framework is based on the idea of the Nash bargaining solution from cooperative game theory, which not only provides the rate settings of users that are Pareto optimal from the point of view of the whole system, but are also consistent with the fairness axioms of game theory. We first consider the centralized problem and then show that this procedure can be decentralized so that greedy optimization by users yields the system optimal bandwidth allocations. We propose a distributed algorithm for implementing the optimal and fair bandwidth allocation and provide conditions for its convergence. The paper concludes with the pricing of elastic connections based on users' bandwidth requirements and users' budget. We show that the above bargaining framework can be used to characterize a rate allocation and a pricing policy which takes into account users' budget in a fair way and such that the total network revenue is maximized.

In this paper we present an abstract, rigorous game-theoretic framework for rate-based control of Available Bit Rate (ABR) services in ATM networks. The framework is based on the idea of the Nash arbitration scheme in cooperative game theory which not only provides the rate settings of users which are Pareto optimal from the network point of view of but are also consistent with the fairness axioms of game theory. We first consider the centralized problem and then show that this procedure can be decentralized such that users can perform the optimization locally such that the overall rates are network optimal. We then consider the problem of charging of ABR connections considering users' valuations for the best-effort service. We propose a flat-rate charging policy such that the total network revenue is maximum. we show that the above arbitration setup can be used to characterize a rate alloca-Broadband Communications P. Kiihn & R. Ulrich (Eds.) © 1998 IFIP. Published by Chapman & Hall Rate allocation and ABR connections in ATM networks 223 tion policy which takes into consideration users' bandwidth requirements and users' valuations in a fair way.

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