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Monitoring output as feedback to the business plane: a first-price auctions with reimbursement pricing scheme

Abstract : Network monitoring has been typically used for technical aspects, though its potential could be exploited up to the business plane. Indeed, we explore the benefits of using monitoring information to apply a reimbursement mechanism when Assured-Quality services are sold via first-price auctions and failures are detected. Intuitively, the presence of failures and reimbursement changes the bidder's offers. At the same time, from the seller's point of view, failures may imply giving money back. Thus, both sides of the market buyer's and seller's must be studied in order to determine the impact that failures and reimbursement have on the seller's revenue. We have theoretically proven that in the simple scenario a reimbursement equal to 100% renders more revenue to the seller than no reimbursement, for same level of failures. In order to address the complex scenario, where no closed forms are available we have developed a simulator. Our simulator computes the bidding strategies for every bidder for different probabilities of failure and percentage of reimbursement through a high-performance code. This output is used when assesing the Expected Seller's Revenue (ESR). Indeed, the ESR can be computed via the well-known Monte Carlo method by performing a high number of independent experiments, which at each step need to compute the bidding strategy.
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Conference papers
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https://hal.archives-ouvertes.fr/hal-00859323
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Submitted on : Friday, September 6, 2013 - 6:32:13 PM
Last modification on : Friday, October 22, 2021 - 9:48:02 AM

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  • HAL Id : hal-00859323, version 1

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Isabel Amigo, Sandrine Vaton, Serge Guelton, Pablo Belzarena. Monitoring output as feedback to the business plane: a first-price auctions with reimbursement pricing scheme. ETICS Industrial Workshop : Economics and Technologies Inter-Carrier Services, Nov 2012, Nozay, France. ⟨hal-00859323⟩

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