Resource allocation in multi-service networks via pricing: statistical multiplexing

Pricing of transmission services on an ATM network is treated as a welfare optimization problem based on imperfect models of demand behavior. Pricing for the service are not optimal, since the allocation of resources are also not optimal. Pricing is based on demand response for the initial pricing interval, with adjustment in prices based on usage in each of the pricing interval. This system needs periodic adjustment since inaccuracies in the pricing policy will be corrected with succeeding pricing formulations.