| Abstract: |
We consider market rules for the transfer of IP addresses, numeric identifiers
required by all computers connected to the Internet. Excessive fragmentation
of IP address blocks causes growth in the Internet's routing table, which is
socially costly, so an IP address market should discourage subdividing IP
address blocks more than necessary. Yet IP address transfer rules also need to
facilitate purchase by the networks that need the addresses most, from the
networks who value them least. We propose a market rule that avoids excessive
fragmentation while almost achieving social efficiency, and we argue that
implementation of this rule is feasible despite the limited powers of central
authorities. We also offer a framework for the price trajectory of IPv4
addresses. In a world with- out uncertainty, the unit price of IPv4 is
constant before the first time when all blocks of IPv4 addresses are in use
and decreasing after that time. With uncertainty, the price before that time
is a martingale, and the price trajectory afterwards is a supermartingale. |