Incentive schemes for Internet congestion management: Raffles versus time-of-day pricing

Abstract

The Internet is plagued with congestion problems of growing severity which are worst at peak periods. In this paper, we compare two schemes that incentivize users to shift part of their usage from the peak-time to the off-peak time. The traditional time-of-day pricing scheme gives a fixed reward per unit of shifted usage. Conversely, the raffle-based scheme provides a random reward distributed in proportion of each user's fraction of the total shifted usage. Using a game-theoretic model, we show that both schemes can achieve an optimal level of decongestion at a unique Nash equilibrium. We provide a comparison of the schemes' sensitivity to uncertainty of the users' utilities.