TY - GEN
T1 - Dynamic budget-constrained pricing in the cloud
AU - Friedman, Eric
AU - Rácz, Miklós Z.
AU - Shenker, Scott
N1 - Publisher Copyright:
© Springer International Publishing Switzerland 2015.
PY - 2015
Y1 - 2015
N2 - We introduce a new model of user-based dynamic pricing in which decisions occur in real time and are strongly influenced by the budget constraints of users. This model captures the fundamental operation of many electronic markets that are used for allocating resources. In particular, we focus on those used in data centers and cloud computing where pricing is often an internal mechanism used to efficiently allocate virtual machines. We study the allocative properties and dynamic stability of this pricing model under a standard framework of cloud computing systems which leads to highly degenerate systems of prices. We show that as the size of the system grows the user-based budget-constrained dynamic pricing mechanism converges to the standard Walrasian prices. However, for finite systems, the prices can be non-degenerate and the allocations unfair, with large groups of users receiving allocations significantly below their fair share. In addition, we show that improper choice of price update parameters can lead to significant instabilities in prices, which could be problematic in real cloud computing systems, by inducing system instabilities and allowing manipulations by users. We construct scaling rules for parameters that reduce these instabilities.
AB - We introduce a new model of user-based dynamic pricing in which decisions occur in real time and are strongly influenced by the budget constraints of users. This model captures the fundamental operation of many electronic markets that are used for allocating resources. In particular, we focus on those used in data centers and cloud computing where pricing is often an internal mechanism used to efficiently allocate virtual machines. We study the allocative properties and dynamic stability of this pricing model under a standard framework of cloud computing systems which leads to highly degenerate systems of prices. We show that as the size of the system grows the user-based budget-constrained dynamic pricing mechanism converges to the standard Walrasian prices. However, for finite systems, the prices can be non-degenerate and the allocations unfair, with large groups of users receiving allocations significantly below their fair share. In addition, we show that improper choice of price update parameters can lead to significant instabilities in prices, which could be problematic in real cloud computing systems, by inducing system instabilities and allowing manipulations by users. We construct scaling rules for parameters that reduce these instabilities.
UR - http://www.scopus.com/inward/record.url?scp=84945534396&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84945534396&partnerID=8YFLogxK
U2 - 10.1007/978-3-319-18356-5_10
DO - 10.1007/978-3-319-18356-5_10
M3 - Conference contribution
AN - SCOPUS:84945534396
SN - 9783319183558
T3 - Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
SP - 114
EP - 121
BT - Advances in Artificial Intelligence - 28th Canadian Conference on Artificial Intelligence, Canadian AI 2015, Proceeding
A2 - Barbosa, Denilson
A2 - Milios, Evangelos
PB - Springer Verlag
T2 - 28th Canadian Conference on Artificial Intelligence, Canadian AI 2015
Y2 - 2 June 2015 through 5 June 2015
ER -