Trading Links and Paths on a Communication Bandwidth Market

This paper presents a novel market model for balancing communication bandwidth trade. The distinguishing characteristic of the model is that it assumes that market players can place buy offers not only for isolated network resources (inter-node links), but also for end-to-end network paths of predefined capacity. It also enables effective balancing of sell and buy offers for network resources in such a way which maximizes the global economic welfare. From a formal point of view, the model produces a linear programming problem for clearing a multi-commodity market. Three simple examples are used to discuss and illustrate the proposed model.