Bandwidth Trading: A Comparison of the Combinatorial and Multicommodity Approach

Abstract

Since the telecommunication market becomes more complex and dynamic, a strong need for a new, efficient and flexible bandwidth trading mechanisms appears. We believe that good mechanisms, that allow effective and fair allocation of bandwidth between market participants will help to develop the real competitive bandwidth market. In this paper we compare two different double-sided bandwidth auction mechanisms, that seem to be well suited approaches for trading indivisible units of bandwidth: combinatorial auction c-SeBiDA and multicommodity mechanism BACBR-I. The c-SeBiDA mechanism considers two types of commodities: inter-node links and paths consisting of particular links. Market participants may bid a single link, or a bundle of links, constituting a specific path. The BACBR-I mechanism is a multicommodity exchange model, that allows bidders to place buy offers not only for individual or bundled links, but rather for end-to-end connections. Therefore, it is the decision model that allocates the most efficient links to connections. We run a large set of experiments to test the allocation and computational efficiency obtained under both approaches.

Keywords

• bandwidth allocation
• combinatorial auction
• computational efficiency
• indivisible resources
• multicommodity trade