Lecture: Competition and Efficiency in Congested Networks
Professor Asu Ozdaglar of the Electrical Engineering and Computer Science Department at MIT will deliver this lecture as part of the Spring 2007 Operations Research/Management Science Seminar series.
All are invited to attend.
Title: Competition and Efficiency in Congested Networks
Abstract: Central to the functioning of today's networks are the complex interactions between self-interested users, service providers, and network operators, and the multi-service requirements of new applications. While there has been much recent work on the allocation of resources among users with heterogeneous service requirements, emphasizing system-wide objectives and the use of prices as control parameters to regulate traffic in a distributed manner, the central role of the service providers in the design and operation of these networks have largely been neglected. Our work is a first attempt to explore some basic questions in this setting: Do prices continue to play the role of control parameters when they are set by service providers? What is the extent of degradation in network performance?
In this talk, we present new models to study price competition among service providers in the presence of congestion externalities. We show that increasing competition among oligopolists can reduce efficiency, measured as the difference between users' performance valuations and delay costs. We characterize tight bounds on the efficiency of pure strategy equilibria with inelastic and elastic traffic, and for different network topologies. We finally consider an environment where service providers compete over both capacities and prices.
This series is organized by the UMass Amherst INFORMS Student Chapter. Support for this series is provided by the Isenberg School of Management, the Department of Finance and Operations Management, and the John F. Smith Memorial Fund.
Check here for more details about this speaker series.
