Dynamic Time-of-Use Pricing for Serverless Edge Computing with Generalized Hidden Parameter Markov Decision Processes

The commercial adoption of Edge Computing (EC) will require pricing schemes that cater to the financial interests of the operators and of the users. Pricing in EC is particularly challenging as it has to take into account the limited amount of edge resources as well as the stochasticity of user workloads due to location-specific workload characteristics and differences in user activity. We formulate the problem of maximizing the revenue of a serverless edge operator through dynamically pricing compute and memory resources under time varying workloads as a sequential decision making problem under uncertainty. We provide analytical results for the optimal pricing strategy in a Markovian setting in steady state. For the general case, we propose a novel Generalized Hidden Parameter Markov Decision Process (GHP-MDP) formulation of the revenue maximization problem, and we propose a dual Bayesian neural network approximator as a solution. The key novelty of the proposed solution is that it can be pre-trained on synthetic traces and adapts fast to previously unseen workload characteristics. We use simulations based on synthetic and real traffic traces to show that the proposed solution is sample-efficient thanks to effective transfer learning, and it outperforms state-of-the-art learning approaches in terms of revenue and learning rate by up to 50% on real traces.