The Internet continues to evolve as it reaches out to a wider user population. The recent introduction of user-friendly navigation and retrieval tools for the World Wide Web has triggered an unprecedented level of interest in the Internet among the media and the general public, as well as in the technical community. It seems inevitable that some changes or additions are needed in the control mechanisms used to allocate usage of Internet resources. In this paper, we argue that a feedback signal in the form of a variable price for network service is a workable tool to aid network operators in controlling Internet traffic. We suggest that these prices should vary dynamically based on the current utilization of network resources. We show how this responsive pricing puts control of network service back where it belongs: with the users.
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Paper provided by EconWPA in its series Microeconomics with number
9606001.
Length: 27 pages Date of creation: 03 Jun 1996 Date of revision: Handle: RePEc:wpa:wuwpmi:9606001
Note: Type of Document - PDF; prepared on Windows; to print on Postscript; pages: 27; figures: Included. Forthcoming in _Internet Economics_, J. Bailey and L. McKnight, eds., MIT Press Contact details of provider: Web page: http://129.3.20.41
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Find related papers by JEL classification: D40 - Microeconomics - - Market Structure and Pricing - - - General D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
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