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Published in:
2008 | OriginalPaper | Chapter
Network Formation and Routing by Strategic Agents Using Local Contracts
Authors : Elliot Anshelevich, Gordon Wilfong
Published in: Internet and Network Economics
Publisher: Springer Berlin Heidelberg
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In the Internet, Autonomous Systems (ASes) make contracts called Service Level Agreements (SLAs) between each other to transit one another’s traffic. ASes also try to control the routing of traffic to and from their networks in order to achieve efficient use of their infrastructure and to attempt to meet some level of quality of service globally. We introduce a game theoretic model in order to gain understanding of this interplay between network formation and routing. Player strategies allow them to make contracts with one another to forward traffic, and to re-route traffic that is currently routed through them. This model extends earlier work of [3] that only considered the network formation aspect of the problem. We study the structure and quality of Nash equilibria and quantify the prices of anarchy and stability, that is, the relative quality of a centralized optimal solution versus that of the Nash equilibria.