Capacitated Network Revenue Management through Shadow Pricing

  • Mustapha Bouhtou
  • Madiagne Diallo
  • Laura Wynter
Part of the Lecture Notes in Computer Science book series (LNCS, volume 2816)


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.


Internet Pricing Network Equilibrium Revenue Maximization Proportional Fairness Bilevel Program congestion control 


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Copyright information

© Springer-Verlag Berlin Heidelberg 2003

Authors and Affiliations

  • Mustapha Bouhtou
    • 1
  • Madiagne Diallo
    • 2
  • Laura Wynter
    • 3
  1. 1.France Telecom R&D, DAC/OATIssy-Les-MoulineauxFrance
  2. 2.Laboratoire PRiSMUniversité de VersaillesVersailles-CedexFrance
  3. 3.IBM Watson Research CenterYorktown HeightsUSA

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