Economics
Networked Internet Life CSE 112 Spring 2007 Prof. Michael Kearns
Modern Networks are Economic Systems
(whether we like it or not)
Highly decentralized and diverse Disparate network administrators operate by local incentives Users may subvert/improvise for their own purposes Regulatory environments for networking technology
for privacy and security concerns in the Internet need more knobs for society-technology interface network growth; peering agreements and SLAs free-riding for shared resources (e.g. in peer-to-peer networks) spam and DDoS as economic problems allocation of scarce resources; conflicting incentives
Can Economic Principles Provide Guidance?
Markets for the exchange of standardized resources
goods & services prices encode exchange rates, compress info efficiency and equilibrium notions for performance measurement strategic behavior and the management of competing incentives behavioral and agent-based approaches
Game theory, competitive and cooperative
Learning and adaptation in economic systems Certain nontraditional topics in economic thought Active research at the CS-economics boundary
The Internet: What is It?
The Internet is a massive network of connected but decentralized computers Began as an experimental research NW of the DoD (ARPAnet) in the 1970s All aspects (protocols, services, hardware, software) evolved over many years Many individuals and organizations contributed Designed to be open, flexible, and general from the start Completely unlike prior centralized, managed NWs
e.g. the AT&T telephone switching network
Internet Basics
Can divide all computers on the Internet into two types:
computers and devices at the edge
your desktop and laptop machines big compute servers like Eniac your web-browsing cell phone, your Internet-enabled toaster, etc. these are called routers they are very fast and highly specialized; basically are big switches
computers in the core
Every machine has a unique Internet (IP) address
IP addresses are how everything finds everything else! Note: the Internet and the Web are not the same!
the Web is one of many services that run on the Internet
IP = Internet Protocol like phone numbers and physical addresses, IP addresses of nearby computers are often very similar your IP address may vary with your location, but its still unique
Internet Packet Routing
At the lowest level, all data is transmitted as packets
small units of data with addressing and other important info if you have large amounts of data to send (e.g. a web page with lots of graphics), it must be broken into many small packets somebody will have to reassemble them at the other end forward packet to the next router on path to destination they only forward to routers they are physically connected to how do they know which neighboring router is next? giant look-up tables for each possible IP address, indicates which router is next need to make use of subnet addressing (similar to zip codes) distributed maintenance of table consistency is complex
e.g. route addresses of form 128.8.*.* to neighbor router A route 128.7.2.* to neighbor router B, etc.
All routers do is receive and forward packets
Routing tables:
Handy programs: traceroute, ping and nslookup
must avoid (e.g.) cycles in routing requires distributed communication/coordination among routers
The IP (Internet Protocol)
There are many possible conventions or protocols routers could use to address issues such as:
what to do if a router is down? who worries about lost packets? what if someone wants their packets to move faster?
However, they all use a single, simple protocol: IP IP offers only one service: best effort packet delivery
Higher-level protocols are layered on top of IP:
with no guarantee of delivery with no levels of service with no notification of lost or delayed packets nothing knows about the applications generating/receiving packets this simplicity is its great strength: provides robustness and speed TCP: for building connections, resending lost packets, etc. http: for the sending and receiving of web pages ssh: for remote access to edge computers etc. etc. etc.
Commercial Relationships in Internet Routing
Customer-Provider Peer-peer
customer pays to send and receive traffic provider transits traffic to the rest of Internet settlement free, under near-even traffic exchanges transit traffic to and from their respective customers
These are existing economic realities They create specific economic incentives that must co-exist with technology, routing protocols, etc.
Sprint AT&T
UUNET
Economic Incentives for Peering
Customer B
How to select peers?
need to reach some other part of the Internet improve end-to-end customer performance avoid payments to upstream providers
early-exit routing
Provider B
multiple peering points
How to route the traffic?
today: early-exit routing to use less bandwidth tomorrow: negotiate for lower total resource usage?
Provider A Customer A
Case Study: Selfish Routing
Standard Internet routing:
route your traffic follows entirely determined by routing tables out of your control generally based on shortest paths, not current congestion! you specify in the packet header the exact sequence of routers better be a legitimate path! in principle, can choose path to avoid congested routers traffic desiring to go from A to B (a flow) viewed as a player actions available to a flow: all the possible routes through the NW penalty to a flow following a particular route: latency in delivery rationality: if flow can get lower latency on a different route, it will!
number of actions = number of routes (huge) number of players = number of flows (huge)
Source routing:
Source routing as a game:
Main Result: Under certain reasonable assumptions, the Price of Anarchy is at most 1/3 no matter how big or complex the network! For more detail see T. Roughgardens excellent slides on the topic
i.e. total latency at most 33% higher than under optimal, centralized (and impossible) planning
Case Study: QoS
QoS = Quality of Service
many varying services and demands on the Internet
varying QoS guarantees required
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