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Routing in Circuit-Switched Networks: Optimization, Shadow Prices and Decentralization

F. P. Kelly
Advances in Applied Probability
Vol. 20, No. 1 (Mar., 1988), pp. 112-144
DOI: 10.2307/1427273
Stable URL: http://www.jstor.org/stable/1427273
Page Count: 33
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Routing in Circuit-Switched Networks: Optimization, Shadow Prices and Decentralization
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Abstract

How should calls be routed or capacity allocated in a circuit-switched communication network so as to optimize the performance of the network? This paper considers the question, using a simplified analytical model of a circuit-switched network. We show that there exist implicit shadow prices associated with each route and with each link of the network, and that the equations defining these prices have a local or decentralized character. We illustrate how these results can be used as the basis for a decentralized adaptive routing scheme, responsive to changes in the demands placed on the network.

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