Capacity management in decentralized networks

Yasushi Masuda, Seungjin Whang

Research output: Contribution to journalArticlepeer-review

14 Citations (Scopus)


Bottleneck analysis is a useful tool in capacity planning for centrally controlled network systems. However, under a decentralized network where individual users are allowed to select their own routes, straightforward application of bottleneck analysis does not necessarily yield an optimal performance. It may even hurt the system performance-an aspect of Braess's paradox. We investigate the capacity expansion problem for a decentralized system with general network topology. To this end, we first discuss the short-run problem and show that the externality pricing solves the joint problem of demand and routing control. We then study the capacity expansion/reduction problem for decentralized systems that may or may not be optimally controlled in the short run.

Original languageEnglish
Pages (from-to)1628-1634
Number of pages7
JournalManagement Science
Issue number12
Publication statusPublished - 2002 Dec
Externally publishedYes


  • Bottleneck analysis
  • Braess's paradox
  • Externality pricing
  • Nash equilibrium
  • Queueing network

ASJC Scopus subject areas

  • Strategy and Management
  • Management Science and Operations Research


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