Abstract
In this paper, we analyze a method that links Lagrange multipliers from a resource allocation problem to the problem of revenue or profit maximization. This technique, first proposed in the transportation science literature by [7] has important implications for telecommunication network pricing. Indeed, the framework provides a generalization of telecommunication resource allocation/shadow price-based schemes such as those of [6] and [9], in that it permits the optimization of the shadow prices themselves, through a computationally simple procedure. We analyze the extent to which revenue can be maximized on a network that uses shadow-price-based prices, and how to deal with cases of unbounded multipliers.
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Bouhtou, M., Diallo, M., Wynter, L. (2003). Capacitated Network Revenue Management through Shadow Pricing. In: Stiller, B., Carle, G., Karsten, M., Reichl, P. (eds) Group Communications and Charges. Technology and Business Models. NGC ICQT 2003 2003. Lecture Notes in Computer Science, vol 2816. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-39405-1_31
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DOI: https://doi.org/10.1007/978-3-540-39405-1_31
Publisher Name: Springer, Berlin, Heidelberg
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