Abstract
The numbers of Internet users continue to grow at astonishing rate so the network congestion is inevitable. However, the bandwidth and the number of users are two factors affecting the Internet quality of service (QoS). The objective of this thesis is to design the pricing mechanism in order to solve the more urgent demands of accessing the Internet. Hence, we propose the pricing model with priority discipline to achieve the maximal benefit and use network resource more efficiently. Here, the response time is chosen as QoS in our pricing model.In this thesis, the basic framework of pricing model is the local Internet Service Provider (ISP) that provides the Internet Access Service to the customers. The pricing model is based on the leader-follower game, i.e., Stackelberg Game, where the ISP is the leader and the user is the follower. Consequently, we can find a Nash equilibrium point from which the ISP and the users would not move out without the cooperation. In addition, we also illustrate a special case to discuss the competition between two ISPs. But the Nash equilibrium point may or may not exist. Finally, we demonstrate some numerical examples to show that the priority discipline can improve the efficiency of Internet and increase the ISP’s profit.