As long as the appropriate cost and valuation functions can be defined, a pricing mechanism can be applied even if money is not directly involved, as in a private network where one organization controls all the users. Of course some incentives are needed to ensure that the users respond as if the prices were going to be applied to their usage, but these incentives could be based on aggregated usage or some other indirect measure. There are many unresolved questions about applying pricing principles to networks. We are undertaking simulation of three different feedback schemes for a simple, two-node ATM network to address some of these questions. With closed-loop pricing, the network measures the state of congestion, calculates a price and informs users of the price.
Users then determin how many cells to send during the next pricing interval.
The network aggregates bids over some sliding window, determines a cutoff, and admits immediately those cells valued at more than the cutoff.