An incentive compatible flow control algorithm for rate allocation in computer networks

The dynamic resource sharing that is a characteristic of store-and-forward computer/communication networks allows efficient use of the communication channel but may result in congestion and unfairness with high utilizations. A flow control algorithm is presented to prevent these effects by fairly allocating input rates to the users of the network. The allocation of rates is posed as an optimization problem where users derive a quantifiable benefit (unknown a priori and depending on network performance) from their use of the network. Total benefits are maximized using information reported by the users in a gradient hill climbing algorithm. The incentive problems that arise are examined, and an incentive-compatible pricing mechanism is introduced that prevents strategic manipulation of the algorithm