TM770: Economics of Networks
Instructor: Dr. Fotios C. Harmantzis, Assistant Professor

Teaching Assistants:

Mr. Saravut Yaipairoj (PhD candidate)
Mr. Vinoth Gunasekaran (PhD student)

Course Aim

 This new course targets advanced Master’s students and Ph.D. students across all Schools (Management, Engineering, Sciences), who are interested in the economics aspects of communication networks.   It is an essential reference to students who are focusing in performance, analysis, design of networks, regulation and policy in telecommunications, economics of information goods and risk management.  The course is intended for students who have quantitative background.

Prerequisites: Calculus and Networks at a university level, e.g., TM 500 and TM 601, or any equivalent.

Text Books:

Material:  We will cover selected chapters from the following textbooks:

• Courcoubetis and Weber. Pricing Communication Networks: Economics, Technology and Modelling, 2003. Wiley & Sons, Inc., England, ISBN 0-470-85130-9
• Varian.  Intermediate Miicroeconomics, Fifth Edition, 1999.  W.W. Norton & Co. ISBN 0-39-3957357
• Bergstrom and Miller. Experiments with Economic Principles: Microeconomics, Second Edition, 1999, McGraw-Hill/Irwin, ISBN 0-07-229518-X

Grading

• Homework Assignments                          15%

• Class Project (Report)                             20%

• Class Participation (Presentation)             15%

• Final Comprehensive Exam                      50%

Part A: Introduction

• J. W. Roberts, "Internet Traffic, QoS and Pricing".
•   Gareth Davies, Michael Hardt and Frank Kelly, "Come the Revolution - Network dimensioning, service costing and pricing in a packet switched environment", Telecommunications Policy 28 (2004) 391-412.
• T. Henderson, J. Crowcroft, S. Bhatti, "Congestion Pricing: Paying Your Way in Communication Networks", IEEE Internet Computing, vol.5 no.5, pp77-81, September/October 2001.
• M. Cave and R. Mason, "The Economics and Regulation of the Internet", Oxford Review of Economic Policy, 17(2), 2001, 188-210.
• Dawson Walker, Frank Kelly and Jonathan Solomon, "Tariffing in the new IP/ATM environment", Telecommunications Policy 21 (1997) 283-295.

Part B: Theory

• Basic Econometrics: Demand, Supply, Equilibrium, Consumer's Surplus, Social Welfare
• Competition Models: Monopoly, Perfect Competition, Oligopoly
• Games Theory
• Externalities
• Auctions

Part C: Applications

• R. Cocchi, S. Shenker, D. Estrin, and L. Zhang, "Pricing in Computer Networks: Motivation, Formulation and Example", IEEE/ACM Transactions on Networking, Vol.1, pp. 617-627, October 1993.
• J.K. MacKie-Mason and H.R. Varian, “Pricing Congestible Network Resources”, IEEE Journal on Selected Areas in Communications, Volume: 13 Issue: 7 , Sept. 1995, Page(s): 1141 –1149
• J.K. MacKie-Mason and H.R. Varian, “Pricing the Internet” In B. Kahin and J. Keller, editors, Public Access to the Internet. Eglewood Cliffs, NJ: Prentice Hall
• M. Odlyzko,” Paris Metro Pricing: The minimalist differentiated services solution”, Proc. 1999 Seventh International Workshop on Quality of Service (IWQoS '99), IEEE, 1999, Page(s) 159-161.
• Courcoubetis, F.P. Kelly, V.A. Siris and R. Weber, "A study of simple usage-based charging schemes for broadband networks", Telecommunications Systems 15 (2000) 323-343.
• M.C. Caesar, S. Balaraman and D. Ghosal, “A comparative study of pricing strategies for IP telephony”,  In Proc. IEEE GLOBECOM, 2000, pp. 344 -349.
• Chris Kenyon and Giorgos Cheliotis, “Stochastic models for telecom commodity prices”, Computer Networks 36(5/6): 533-555 (2001).
• Y. d’Halluin, P.A. Forsyth, and K.R. Vetzal. “Managing Capacity for Telecommunications Networks under Uncertainty”, IEEE Trans. Networks 10:579-588 (2002).
• V. Siris, B. Briscoe and D. Songhurst , "Economic Models for Resource Control in Wireless Networks". In Proc. of 13th IEEE Int'l Symposium on Personal, Indoor and Mobile Radio Communications (PIMRC), Lisbon, Portugal, September 2002.
• J. Hou, J. Yang and S. Papavassilliou, “Integration of pricing with call admission control to meet QoS requirements in cellular networks”. IEEE Trans. Parallel and Distributed Systems, Vol. 13, No. 9, Sep. 2002.
• J. Musacchio and J. Walrand, "Game Theoretic Modeling of WiFi Pricing", University of California, Berkeley, 2003
• E. Friedman, D. Parkes, "Pricing WiFi at Starbucks- Issues in Online Mechanism Design" 

Part D: Current Research

• Auction-Based Pricing of GPRS Services with Wi-Fi Integrations
• Cost Analysis of WLAN Integrated with GSM/GPRS Networks
• Spectra Auctions Design

Recommended Texts

• Laffont and Tirole. Competition in Telecommunications. The MIT Press, 2001, ISBN: 0262621509
• Cave, Majumdar and Vogelsang. Handbook of Telecommunications Economics. Elsevier Science, 2002. ISBN: 0444503897
• Sidak and Spulber. Deregulatory Takings and the Regulatory Contract: The Competitive Transformation of Network Industries in the United States. Cambridge University Press, 1998, ISBN: 0521658713
• Shapiro and Varian. Information Rules: A Strategy Guide to the Information Economy. Harvard Business School Press, 1998, ISBN: 087584863X
• Michel and Vogelsang. Telecommunications Pricing: Theory and Practice.  Cambridge University Press, 1991, ISBN: 0521426782