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Dynamic Pricing of Relocating Resources in Large Networks

Publication ,  Conference
Balseiro, SR; Brown, DB; Chen, C
Published in: Performance Evaluation Review
December 17, 2019

We study dynamic pricing of resources that are distributed over a network of locations (e.g., shared vehicle systems and logistics networks). Customers with private willingness-To-pay sequentially request to relocate a resource from one location to another. We focus on networks with a hub-And-spoke structure. We develop a dynamic pricing policy and a performance bound based on a Lagrangian relaxation. This relaxation decomposes the problem over spokes and is thus far easier to solve than the original problem. We analyze the performance of the Lagrangian-based policy and focus on a large network regime in which the number of spokes (n) and number of resources grow at the same rate. We show that our policy loses no more than O (p lnn/n) in performance compared to an optimal policy, thus implying asymptotic optimality as n grows large. We provide examples that show that upper bounds and static policies based on fluid relaxations fail to work well in this asymptotic regime. Finally, we discuss how our approach extends to more general networks involving multiple, interconnected hubs.

Duke Scholars

Published In

Performance Evaluation Review

DOI

ISSN

0163-5999

Publication Date

December 17, 2019

Volume

47

Issue

1

Start / End Page

29 / 30

Related Subject Headings

  • Networking & Telecommunications
 

Citation

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MLA
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Balseiro, S. R., Brown, D. B., & Chen, C. (2019). Dynamic Pricing of Relocating Resources in Large Networks. In Performance Evaluation Review (Vol. 47, pp. 29–30). https://doi.org/10.1145/3309697.3331512
Balseiro, S. R., D. B. Brown, and C. Chen. “Dynamic Pricing of Relocating Resources in Large Networks.” In Performance Evaluation Review, 47:29–30, 2019. https://doi.org/10.1145/3309697.3331512.
Balseiro SR, Brown DB, Chen C. Dynamic Pricing of Relocating Resources in Large Networks. In: Performance Evaluation Review. 2019. p. 29–30.
Balseiro, S. R., et al. “Dynamic Pricing of Relocating Resources in Large Networks.” Performance Evaluation Review, vol. 47, no. 1, 2019, pp. 29–30. Scopus, doi:10.1145/3309697.3331512.
Balseiro SR, Brown DB, Chen C. Dynamic Pricing of Relocating Resources in Large Networks. Performance Evaluation Review. 2019. p. 29–30.

Published In

Performance Evaluation Review

DOI

ISSN

0163-5999

Publication Date

December 17, 2019

Volume

47

Issue

1

Start / End Page

29 / 30

Related Subject Headings

  • Networking & Telecommunications