Receiver-initiated group membership protocol (RGMP): A new group management protocol for IP multicasting



5HFHLYHULQLWLDWHG *URXS 0HPEHUVKLS 3URWRFRO 5*03 D 1HZ *URXS

0DQDJHPHQW 3URWRFRO IRU ,3 0XOWLFDVWLQJ

:DQMLXQ /LDR DQG 'H1LDQ <DQJ

'HSDUWPHQW RI (OHFWULFDO (QJLQHHULQJ

1DWLRQDO 7DLZDQ 8QLYHUVLW\

7DLSHL 7DLZDQ

(PDLO ZMOLDR#FFHHQWXHGXWZ

$EVWUDFW

QHWZRUNHG VHUYLFH IRU PDQ\ H[LVWLQJ DQG HPHUJLQJ DSSOLFDWLRQV 7KH GRPLQDQW PHFKDQLVP IRU JURXS PDQDJHPHQW RI ,3 PXOWLFDVWLQJ LV WKH ,QWHUQHW *URXS 0DQDJHPHQW 3URWRFRO ,*03 ,*03 LV EDVHG RQ D TXHU\UHSO\ PRGHO DQG UHIUHVKHV JURXS PHPEHUVKLS SHULRGLFDOO\ ,*03 KDV EHHQ HYROYLQJ WKURXJK WKUHH YHUVLRQV ,*03 Y GHYHORSV WKH EDVLV RI WKH TXHU\UHSO\ JURXS PDQDJHPHQW PRGHO DQG VXSSUHVVLRQ PHFKDQLVP ,*03 Y UHGXFHV OHDYH ODWHQF\ WKDW ,*03 Y VXIIHUV IURP DQG ,*03 Y DGGV WKH FDSDELOLW\ RI VRXUFH ILOWHULQJ EXW UHPRYHV WKH VXSSUHVVLRQ PHFKDQLVP RI ,*03 YY ,Q WKLV SDSHU D QHZ JURXS PDQDJHPHQW SURWRFRO FDOOHG 5HFHLYHGLQLWLDWHG *URXS 0HPEHUVKLS 3URWRFRO 5*03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



,QWURGXFWLRQ

%HLQJ DQ LPSRUWDQW VXEMHFW ERWK LQ UHVHDUFK DQG GHYHORSPHQW >@>@ ,3 PXOWLFDVW LV NH\ LQ PDQ\ H[LVWLQJ DQG HPHUJLQJ ,QWHUQHW DSSOLFDWLRQV LQFOXGLQJ EXON GDWD GLVVHPLQDWLRQ UHVRXUFH GLVFRYHU\ UHSOLFDWHG GDWDEDVH XSGDWH UHDOWLPH YLGHR FRQIHUHQFLQJ DQG PHGLDRQGHPDQG MXVW WR QDPH D IHZ $ PXOWLFDVW GDWD

SDFNHW FRQWDLQV D FODVV ' JURXS DGGUHVV _{LQ WKH}

GHVWLQDWLRQ DGGUHVV ILHOG RI WKH ,3 KHDGHU DQG LV GHOLYHUHG WR GHVWLQDWLRQ JURXS PHPEHUV ZLWK WKH VDPH ³EHVWHIIRUW´ GHOLYHU\ DV XQLFDVW ,3 GDWD WUDQVPLVVLRQ ,W LV QRW QHFHVVDU\ IRU D KRVW WKDW VHQGV GDWD WR D PXOWLFDVW JURXS WR EH D JURXS PHPEHU ,QGLYLGXDO KRVWV DUH IUHH WR MRLQ RU OHDYH D PXOWLFDVW JURXS DW DQ\ WLPH 1R UHVWULFWLRQ LV SODFHG RQ WKH SK\VLFDO ORFDWLRQ DQG WKH QXPEHU RI JURXS PHPEHUV DQG RQ WKH QXPEHU RI JURXSV D KRVW FDQ SDUWLFLSDWH

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 ,*03 DGRSWV D TXHU\UHSO\ PRGHO IRU FRPPXQLFDWLRQV EHWZHHQ JURXS KRVWV DQG PXOWLFDVW URXWHUV DQG UHIUHVKHV JURXS PHPEHUVKLS SHULRGLFDOO\

 WR FRSH ZLWK WKH G\QDPLF MRLQ DQG GHSDUWXUH RI JURXS PHPEHUV DQG WR LQFUHDVH UREXVWQHVV WR FRSH ZLWK WKH EHVWHIIRUW GHOLYHU\ QDWXUH RI ,3EDVHG QHWZRUNV

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

,*03 KDV EHHQ HYROYLQJ WKURXJK WKUHH YHUVLRQV QDPHO\ ,*03 YHUVLRQ Y >@ ,*03 YHUVLRQ Y >@ DQG ,*03 YHUVLRQ Y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 DQG WZR TXHU\ LQWHUYDOV D ORQJHU TXHU\ LQWHUYDO  VHF IRU

JHQHUDO TXHU\ DQG D VKRUWHU LQWHUYDO  VHF IRU JURXS VSHFLILF TXHU\ ,*03 Y EDVHG RQ ,*03 Y DGGV WKH FDSDELOLW\ RI VRXUFH ILOWHULQJ EXW UHPRYHV WKH VXSSUHVVLRQ PHFKDQLVP RI ,*03 YY 6RXUFH ILOWHULQJ LV WKH DELOLW\ IRU DQ LQGLYLGXDO KRVW WR VSHFLI\ WKH UHFHSWLRQ RI SDFNHWV VHQW WR D PXOWLFDVW JURXS RQO\ IURP D OLVW RI VRXUFH DGGUHVVHV LQFOXGH PRGH RU WR H[SOLFLWO\ LGHQWLI\ D OLVW RI WKH VRXUFHV WKH KRVW GRHV QRW ZDQW WR UHFHLYH IURP D PXOWLFDVW JURXS H[FOXGH PRGH %RWK ,*03 Y DQG Y FDQ EH WUHDWHG DV D VSHFLDO FDVH RI ,*03 Y ZLWK DOO JURXS PHPEHUV UHTXHVWLQJ IRU D ZLOGFDUG VRXUFH ILOWHU QDPHO\ SODFLQJ QR VRXUFH ILOWHU RQ WKH JURXS DQG UHFHLYLQJ GDWD IURP DOO VRXUFHV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

,Q WKLV SDSHU D QHZ JURXS PDQDJHPHQW SURWRFRO IRU ,3 V\VWHPV FDOOHG 5HFHLYHGLQLWLDWHG *URXS 0HPEHUVKLS 3URWRFRO 5*03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

 ,*03 YY ZKLFK DSSOLHV RQO\ IRU SHULRGLFDO UHIUHVK UHSRUW PHVVDJH 5*03 LV UREXVW VFDODEOH DQG DGDSWLYH 3URWRFRO RYHUKHDUG RI 5*03 LV PXFK OHVV WKDQ WKDW RI ,*03 Y LUUHVSHFWLYH RI JURXS VL]H JURXS QXPEHU QXPEHU RI KRVWV SDUWLFLSDWLQJ LQ DQ\ JURXS SHUFHQWDJH RI KRVWV RQ D QHWZRUN KDYLQJ VRXUFH ILOWHULQJ DQG JURXS FKDQJH UDWH RI D KRVW

7KH UHVW RI WKH SDSHU LV RUJDQL]HG DV IROORZV 6HFWLRQ  GHVFULEHV 5*03 LQ GHWDLOV 6HFWLRQ  VKRZV WKH VLPXODWLRQ UHVXOWV )LQDOO\ WKH FRQFOXVLRQV DUH PDGH LQ 6HFWLRQ 

 5HFHLYHULQLWLDWHG *URXS 0HPEHUVKLS

3URWRFRO 5*03

7KH 5HFHLYHULQLWLDWHG *URXS 0HPEHUVKLS 3URWRFRO 5*03 LV D SURWRFRO IRU ,3 V\VWHPV WR UHSRUW JURXS PHPEHUVKLS WR WKH QHLJKERULQJ PXOWLFDVW URXWHUV ,QVWHDG RI IROORZLQJ WKH TXHU\UHSO\ PRGHO DV LQ ,*03 JURXS PHPEHUV DFWLYHO\ UHIUHVK WKHLU PHPEHUVKLS RQ H[SLU\ RI UHIUHVK WLPHUV ,Q WKLV VHFWLRQ SURWRFRO FKDUDFWHULVWLFV DUH GHVFULEHG ILUVW IROORZHG E\ WKH GHWDLOV RI WKH PHFKDQLVP



&KDUDFWHULVWLFV

7KH FKDUDFWHULVWLFV RI 5*03 DUH VXPPDUL]HG DV IROORZV ,PSURYHPHQWV LQ SHUIRUPDQFH FRPSDUHG WR ,*03 ZLOO EH YDOLGDWHG E\ VLPXODWLRQ LQ D ODWHU VHFWLRQ

 5REXVWQHVV 5*03 DGRSWV VRIW VWDWH WR LPSURYH UREXVWQHVV UHIUHVKLQJ JURXS PHPEHUVKLS DQG VRXUFH ILOWHULQJ SHULRGLFDOO\ WR FRSH ZLWK WKH EHVWHIIRUW GHOLYHU\ QDWXUH RI ,3 V\VWHPV

 6RXUFH ILOWHU ZLWK VXSSUHVVLRQ 5*03 VXSSRUWV ERWK VRXUFH ILOWHULQJ DQG VXSSUHVVLRQ )RU ERWK ,*03 Y DQG Y QR VRXUFH ILOWHU LV VXSSRUWHG IRU ,*03 Y QR VXSSUHVVLRQ LV SURYLGHG 7KH VRXUFH ILOWHU PHFKDQLVP DOORZV KRVW PHPEHUV WR FXVWRPL]H WKHLU SUHIHUHQFHV IRU WKH UHFHSWLRQ RI GDWD IURP VRXUFHV ZKLOH VXSSUHVVLRQ DYRLGV UHSRUW PHVVDJH LPSORVLRQ IURP KRVW PHPEHUV

 6FDODELOLW\ :LWK WKH VXSSRUW RI WKH VXSSUHVVLRQ PHFKDQLVP UHSRUW PHVVDJH LPSORVLRQ LV DYRLGHG

7KXV SURWRFRO RYHUKHDG GRHV QRW LQFUHDVH DV WKH QXPEHU RI JURXSV LQFUHDVHV DV LQ ,*03 YY RU DV WKH QXPEHU RI KRVWV LQFUHDVHV DV LQ ,*03 Y  5HFHLYHULQLWLDWHG UHIUHVK WLPHU 7KH UHFHLYHULQLWLDWHG

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

 6HOIV\QFKURQL]HG UHIUHVK WLPHU :LWK ,*03 FRQWURO PHVVDJHV DUH XVXDOO\ H[FKDQJHG SHULRGLFDOO\ DFWLYDWHG E\ D VLQJOH TXHU\ VHQW E\ D URXWHU 7KLV FDXVHV D SHULRGLFDO EXUVW RI RYHUKHDG PHVVDJHV DQG WKXV LQFUHDVHV WKH SRVVLELOLW\ RI SDFNHW FROOLVLRQV HVSHFLDOO\ DV WKH QXPEHU _{RI JURXSV LQFUHDVHV ,Q}

FRQWUDVW DQ 5*03 UHIUHVK WLPHU LV UHVHW SHU JURXS RU SHU JURXSVRXUFH RQ D VHOIV\QFKURQL]DWLRQ EDVLV $ MRLQ VWDWH FKDQJH RU WKH ILUVW SHULRGLFDO UHIUHVK UHSRUW LQ D JURXS VXSSUHVVHV WKH WUDQVPLVVLRQ DQG UHVHWV RU V\QFKURQL]HV WKH UHIUHVK WLPHU RI HDFK PHPEHU KRVW LQ WKH JURXS $V D UHVXOW SDFNHW WUDQVPLVVLRQV DUH GLVWULEXWHG VPRRWKO\ RYHU WLPH

 $GDSWLYLW\ 1R VRXUFH ILOWHULQJ LV VXSSRUWHG E\ ,*03 YY VR WKDW ,*03 YY FDQ EH WUHDWHG DV D VSHFLDO FDVH RI ,*03 Y ZLWK ZLOGFDUG VRXUFH ILOWHU IRU DOO KRVWV ,*03 YY KRZHYHU DOORZV UHSRUW VXSSUHVVLRQ 7KH SURWRFRO RYHUKHDG LQFUHDVHV PDLQO\ DV WKH QXPEHU RI JURXSV RQ D /$1 LQFUHDVHV LUUHVSHFWLYH RI WKH QXPEHU RI PHPEHUV LQ D JURXS

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



0HFKDQLVP DQ RYHUYLHZ

7KH 5HFHLYHULQLWLDWHG *URXS 0HPEHUVKLS 3URWRFRO 5*03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 RU H[SLU\ RI WKH UHIUHVK WLPHU 6WDWH LQIRUPDWLRQ PDLQWDLQHG E\ D KRVW LQFOXGHV JURXS LG LH PXOWLFDVW DGGUHVV ILOWHU PRGH VRXUFH OLVW UHIUHVK WLPHU DQG VXSSUHVVLRQ IODJ 7KH JURXS LG LV D JURXS DGGUHVV DQG WKH ILOWHU PRGH FDQ EH HLWKHU LQFOXGH RU H[FOXGH 7KH VRXUFH OLVW FRQVLVWV RI D OLVW RI VRXUFH DGGUHVVHV LG &RQWUDU\ WR ,*03 Y HDFK HOHPHQW LQ DQ 5*03 VRXUFH OLVW LV DVVRFLDWHG ZLWK D VRXUFH IODJ XVHG IRU VXSSUHVVLRQ 7KH LQWHUSUHWDWLRQ RI D

VRXUFH IODJ GHSHQGV RQ WKH W\SH RI ILOWHU PRGH  :KHQ WKH ILOWHU PRGH LV ³LQFOXGH´ LI D VRXUFH HOHPHQW LV DVVRFLDWHG ZLWK WKH ³RQ´ IODJ LW PXVW KDYH EHHQ UHIUHVKHG E\ D SUHYLRXV UHSRUW PHVVDJH ZLWKLQ D UHIUHVK LQWHUYDO RWKHUZLVH WKH IODJ LV RII  :KHQ WKH ILOWHU PRGH LV ³H[FOXGH´ LI D VRXUFH HOHPHQW DVVRFLDWHG ZLWK WKH ³RQ´ IODJ WKH HOHPHQW LV ZDLWLQJ WR EH UHIUHVKHG )RU H[DPSOH )LJXUH  VKRZV D PHPEHUVKLS OLVW PDLQWDLQHG E\ D KRVW SDUWLFLSDWLQJ LQ JURXSV   DQG  RQ D ORFDO QHWZRUN ,Q JURXS  VRXUFH ILOWHU PRGH LV H[FOXGH^` PHDQLQJ WKDW WKH KRVW DFFHSWV DQ\ FRPLQJ VRXUFHV IURP WKLV LQWHUIDFH WR JURXS  )LOWHU PRGH RI H[FOXGH^$` XVXDOO\ KDV D ODUJHU DFFHSWHG VRXUFH OLVWV WKDQ WKDW RI LQFOXGH^$` ZKHUH $ LV D OHJDO VRXUFH OLVW [ \ ] ,Q JURXS  VRXUFH HOHPHQWV D DQG F KDYH WKHLU VRXUFH IODJV RQ ZKLOH VRXUFH E KDV WKH IODJ RII LQGLFDWLQJ WKDW ERWK D DQG F KDYH EHHQ VXSSUHVVHG E\ SUHYLRXV UHSRUW PHVVDJHV EXW E KDV QRW 2QFH WKH IODJ RI HOHPHQW E WXUQV WR ³RQ´ IURP EHLQJ UHIUHVKHG E\ D UHSRUW PHVVDJH LH DOO HOHPHQWV LQ WKH VRXUFH OLVW KDYH WKHLU IODJV RQ EHIRUH WKH H[SLU\ RI WKH UHIUHVK WLPHU W WKH VXSSUHVVLRQ IODJ RI JURXS  ZLOO EH VHW WR RQ

7KH UHIUHVK WLPHU FRQWUROV WKH WLPH LQWHUYDO WR UHIUHVK JURXS PHPEHUVKLS LQ PXOWLFDVW URXWHUV 2Q H[SLU\ RI D UHIUHVK WLPHU D UHIUHVK UHSRUW LV VHQW 7KH VXSSUHVVLRQ IODJ UHFRUGV WKH VXSSUHVVLRQ VWDWXV IRU HDFK SDUWLFLSDWHG JURXS ,I WKH VXSSUHVVLRQ IODJ LV FXUUHQWO\ ³RQ´ LW LQGLFDWHV WKDW WKH FRUUHVSRQGLQJ JURXS KDV EHHQ VXSSUHVVHG E\ SUHYLRXV UHFHLYHG UHSRUWV RWKHUZLVH WKH VXSSUHVVLRQ IODJ LV ³RII´ 7KH YDOXH RI D UHIUHVK WLPHU LV GHWHUPLQHG E\ WKH VWDWXV RI WKH VXSSUHVVLRQ IODJ ,I WKH VXSSUHVVLRQ IODJ LV 21 LQGLFDWLQJ WKDW WKH JURXS KDV EHHQ VXSSUHVVHG E\ SUHYLRXV UHSRUWV D UDQGRP GHOD\ LV VHW IURP WKH UDQJH RI >7 7 RWKHUZLVH WKH VXSSUHVVLRQ IODJ LV RII DQG D UDQGRP GHOD\ LV VHOHFWHG IURP WKH UDQJH RI >7 7 ZKHUH   7  7  7_

)RU H[DPSOH LQ )LJXUH  W RI JURXS  RU JURXS  LV VHW

_{7R KDYH D IDLU FRPSDULVRQ ZLWK ,*03 Y 7 LV VHW WR  7 LV VHW WR}

 WR D YDOXH LQ   DQG W RI JURXS  LV LQ   7KH SXUSRVH RI XVLQJ WZR GLIIHUHQW WLPHU YDOXHV IRU WZR W\SHV RI VXSSUHVVLRQ IODJ LV WR HQVXUH WKDW JURXSV ZLWK IODJ ³RQ´ ZLOO QRW VHQG D UHSRUW WR PXOWLFDVW URXWHUV EHFDXVH WKHLU WLPHUV DOZD\V H[SLUH DIWHU WKRVH ZLWK IODJ ³RII´ DQG ZLOO EH VXSSUHVVHG

)LJXUH  $Q H[DPSOH PHPEHUVKLS OLVW RI D KRVW

2SHUDWLRQ RYHUYLHZ

 +RVW

$ KRVW WUDQVPLWV D UHSRUW WR PXOWLFDVW URXWHUV XSRQ MRLQLQJ RU OHDYLQJ JURXSV FKDQJLQJ VWDWHV RU ZKHQ WKH UHIUHVK WLPHUV H[SLUH 6HQGLQJ D UHSRUW PHVVDJH FRPHV ZLWK WKUHH VWDWH VHWWLQJV SHU JURXS LQ WKH KRVW WKH VXSSUHVVLRQ IODJ LV VHW WR RII WKH UHIUHVK WLPHU LV UHVHW DFFRUGLQJO\ DQG DOO VRXUFH IODJV DUH UHVHW LH DOO VRXUFH IODJV DUH RII DW WKH HQG 7KH H[DFW RSHUDWLRQ RI VRXUFH IODJ UHVHW GHSHQGV RQ WKH W\SH RI ILOWHU PRGH ,I WKH ILOWHU PRGH LV ³LQFOXGH´ DOO VRXUFH IODJV FXUUHQWO\ RQ DUH VHW WR RII RWKHUZLVH WKH ILOWHU PRGH LV H[FOXGH DQG KHQFH DOO VRXUFH HOHPHQWV ZLWK VRXUFH IODJV FXUUHQWO\ RQ DUH UHPRYHG $ VLQJOH UHSRUW PHVVDJH FRQVLVWLQJ RI DOO LQYROYHG JURXSV LV VHQW )RU UHSRUWV VHQW XSRQ MRLQLQJ D JURXS ³LQYROYHG´ UHIHUV WR ³LQWHUHVWHG´ IRU VWDWH FKDQJHV ³LQYROYHG´ UHIHUV WR ³PRGLILHG´ DQG IRU GHSDUWXUH ³LQYROYHG´ UHIHUV WR ³XQVXSSUHVVHG´ LH WKRVH ZLWK VXSSUHVVLRQ IODJV RII

$ KRVW PD\ UHFHLYH D UHSRUW PHVVDJH EHIRUH WKH H[SLU\ RI WKH UHIUHVK WLPHU ,I WKH UHFHLYHG UHSRUW LV D QHZ MRLQ RU UHIUHVK PHVVDJH WKH VXSSUHVVLRQ UXOH LV DSSOLHG 2WKHUZLVH ZKHQ WKH UHFHLYHG UHSRUW LV D OHDYH D UHSRUW PHVVDJH ZLWK LQFOXGH^` IRU D JURXS RU VWDWH FKDQJH PHVVDJH LQ WKH VDPH JURXS LI WKH VXSSUHVVLRQ IODJ LV RII WKH UHIUHVK WLPHU LV UHVHW WR D VPDOO YDOXH VD\  VHF RWKHUZLVH WKH UHIUHVK WLPHU LV UHVHW WR D VOLJKWO\ ORQJHU UDQGRP GHOD\ VD\  VHF $ UHIUHVK PHVVDJH DJDLQ LV VHQW DV WKH UHIUHVK WLPHU H[SLUHV

 0XOWLFDVW URXWHU

$ PXOWLFDVW URXWHU SDVVLYHO\ KDQGOHV UHSRUW PHVVDJHV VHQW E\ KRVWV 7KH RSHUDWLRQV SHUIRUPHG E\ URXWHUV DUH VLPLODU WR ZKDW ,*03 Y URXWHUV GR H[FHSW DOO TXHULHUV DQG WKH UHODWHG PHFKDQLVPV DUH UHPRYHG WR VLPSOLI\ WKH GHVLJQ RI WKH URXWHUV

6XSSUHVVLRQ UXOH

$VVXPH WKDW KRVW + MRLQV JURXS * ZLWK ILOWHU PRGH 0RGH$ DQG VRXUFH OLVW 6RXUFH$ :KHQ D UHSRUW PHVVDJH VHQW E\ RWKHU KRVW LQ WKH VDPH JURXS * LV UHFHLYHG ZLWK ILOWHU PRGH 0RGH% DQG VRXUFH OLVW 6RXUFH%

 ZKHQ 0RGH$ LQFOXGH

D ZKHQ 0RGH% LQFOXGH ∀ [ LQ ^6RXUFH$ ∩ 6RXUFH%` WKH VRXUFH IODJ RI [ LQ 6RXUFH$ LV VHW WR RQ

E ZKHQ 0RGH% H[FOXGH∀ [ LQ 6RXUFH$ LI [ ∉ 6RXUFH% WKH VRXUFH IODJ RI [ LV VHW WR RQ )RU ERWK D DQG E LI DOO WKH HOHPHQWV LQ 6RXUFH$ KDYH WKHLU IODJV RQ WKH VXSSUHVVLRQ IODJ RI * LV VHW WR RQ WKH UHIUHVK WLPHU LV UHVHW DFFRUGLQJO\ DQG WKH VRXUFH IODJV RI DOO HOHPHQWV LQ 6RXUFH$ DUH VHW WR RII  ZKHQ 0RGH$ H[FOXGH

D ZKHQ 0RGH% LQFOXGH OHW 6RXUFH' ∅ ∀ [ ZLWK VRXUFH IODJ RQ LQ 6RXUFH$ 6RXUFH' 6RXUFH' ∪^[` ,I 6RXUFH' ≠ ∅ 6RXUFH$ 6RXUFH$ ± ^6RXUFH% ∩ 6RXUFH'` ,I QR HOHPHQW LQ 6RXUFH$ KDV LWV VRXUFH IODJ RQ ZKLOH 6RXUFH' ≠ ∅ VXSSUHVVLRQ IODJ RI * LV VHW WR RQ DQG WKH UHIUHVK WLPHU LV UHVHW DFFRUGLQJO\

E ZKHQ 0RGH% H[FOXGH

 ,I ∀ [ LQ 6RXUFH$ IODJV DUH RII 6RXUFH' ^6RXUFH$ ∪ 6RXUFH%` ± 6RXUFH$ ,I 6RXUFH' ≠ ∅ ∀ [ LQ 6RXUFH' VHW WKH VRXUFH IODJ RI [ WR EH RQ 6RXUFH$ 6RXUFH$ ∪ 6RXUFH' RWKHUZLVH WKH VXSSUHVVLRQ IODJ RI * LV VHW WR RQ DQG WKH UHIUHVK WLPHU LV UHVHW DFFRUGLQJO\

 ,I ∃ [ LQ 6RXUFH$ ZLWK VRXUFH IODJ RQ WKHQ ∀

*URXS

,' )LOWHU PRGH 6XSSUHVVLRQIODJ 5HIUHVKWLPHU 6RXUFH OLVW

 ([FOXGH 2)) W ^`

 ([FOXGH 21 W ^D 21`

 [ ZLWK VRXUFH IODJ RQ LQ 6RXUFH$ DQG [ ∉ 6RXUFH% 6RXUFH$ 6RXUFH$ ± ^[` ,I WKHUH LV QR HOHPHQW LQ 6RXUFH$ ZLWK LWV VRXUFH IODJ RQ WKH VXSSUHVVLRQ IODJ RI * LV VHW WR RQ DQG WKH UHIUHVK WLPHU LV UHVHW DFFRUGLQJO\

 3HUIRUPDQFH (YDOXDWLRQ

7R VXSSOHPHQW WKH FRPSDULVRQV RI ,*03 DQG 5*03 ZH H[DPLQH WKH SURWRFRO RYHUKHDG LQ WHUPV RI EDQGZLGWK UHTXLUHPHQWV_{RQ D ORFDO QHWZRUN 7KH PHDVXUHG UHVXOWV}

YDU\ ZLWK WKH IROORZLQJ PHWULFV  WKH QXPEHU RI KRVWV SDUWLFLSDWLQJ LQ DQ\ JURXSV RQ D /$1 KRVW QXPEHU  WKH QXPEHU RI KRVWV LQ D JURXS JURXS VL]H  WKH QXPEHU RI GLIIHUHQW JURXSV RQ D /$1 JURXS QXPEHU  JURXS MRLQGHSDUWXUH UDWH RI D KRVW MRLQOHDYH UDWH  WKH SHUFHQWDJH RI KRVWV ZLWK VRXUFH ILOWHU RQ D /$1 DQG  SURWRFRO RYHUKHDG GLVWULEXWLRQ RYHU WKH WLPHOLQH 7KH VLPXODWLRQ ZDV SHUIRUPHG RYHU WKUHH KRXUV DQG XQGHU WKUHH DVVXPSWLRQV  QR SDFNHW ORVV DQG KHQFH QR UHWUDQVPLVVLRQ IRU PHVVDJH H[FKDQJH  QR FRPPXQLFDWLRQV GHOD\ EHWZHHQ KRVWV DQG KRVWVURXWHUV RQ WKH UHFHSWLRQ RI TXHU\UHSRUW PHVVDJHV DQG  WKH IROORZLQJ WZR SURFHVVHV DUH DVVXPHG WR EH 3RLVVRQ ZLWK λ  SHU VHF WKH MRLQGHSDUWXUH SURFHVV RI D JURXS DQG WKH MRLQGHSDUWXUH SURFHVV RI D VRXUFH ZLWKLQ D JURXS

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

 _{,Q WKLV VHFWLRQ SURWRFRO RYHUKHDG ZDV PHDVXUHG LQ WHUPV RI}

EDQGZLGWK UHTXLUHPHQWV UDWKHU WKDQ WKH QXPEHU RI FRQWURO SDFNHWV

VRXUFH ILOWHULQJ DQ LQGLYLGXDO JURXS PHPEHU LV IUHH WR VHOHFW D ILOWHU PRGH DQG D VRXUFH OLVW IURP  GLIIHUHQW VRXUFH ,3 DGGUHVVHV )RU H[DPSOH KRVW  PD\ KDYH VRXUFH ILOWHU RI LQFOXGH ^` DQG KRVW  PD\ KDYH VRXUFH ILOWHU RI H[FOXGH ^` 3URWRFRO RYHUKHDG RI ,*03 Y DQG Y DUH LQFOXGHG LQ ILJXUHV ZLWKRXW VRXUFH ILOWHULQJ PDLQO\ IRU UHIHUHQFH

 +RVW QXPEHU

D :LWKRXW VRXUFH ILOWHULQJ E :LWK VRXUFH ILOWHULQJ )LJXUH +RVW QXPEHU YV SURWRFRO RYHUKHDG 5HVXOWV DUH PHDVXUHG RYHU DQ LQGLYLGXDO KRVW SDUWLFLSDWLQJ DW PRVW LQ  JURXS QXPEHUV ZLWK KRVW QXPEHU RQ D /$1 WKDW SDUWLFLSDWHV LQ DQ\ JURXS YDU\LQJ IURP  WR  )LJXUH  D VKRZV WKH UHVXOWV ZLWKRXW VRXUFH ILOWHULQJ DQG )LJXUH  E ZLWK VRXUFH ILOWHULQJ %RWK ILJXUHV LOOXVWUDWH WKDW WKH RYHUKHDG RI ,*03 Y LQFUHDVHV DV KRVW QXPEHU LQFUHDVHV ZKLOH WKDW RI 5*03 LV DOPRVW LQYDULDQW WR WKH LQFUHDVH RI KRVW QXPEHU RQ D /$1 ,Q DGGLWLRQ WKH SURWRFRO RYHUKHDG RI 5*03 LV YHU\ FORVH WR WKDW RI ,*03 YY DV VKRZQ LQ )LJXUH D DOWKRXJK DQ ,*03 YY TXHU\UHSRUW PHVVDJH KDV D IL[HGVL]H SDFNHW RI  E\WHV DQG DQ 5*03 UHSRUW PHVVDJH XVLQJ WKH VDPH IRUPDW DV WKDW RI ,*03 Y LV UHODWLYHO\ ODUJH

 *URXS VL]H

5HVXOWV DUH PHDVXUHG RYHU  KRVWV ZLWK HDFK SDUWLFLSDWLQJ DW PRVW LQ  JURXSV ZLWK JURXS VL]H RQ D /$1 YDU\LQJ IURP  WR  )LJXUH  D VKRZV WKH UHVXOWV ZLWKRXW VRXUFH ILOWHULQJ DQG )LJXUH  E ZLWK VRXUFH ILOWHULQJ &RQVLGHULQJ WKH RQH ZLWKRXW VRXUFH ILOWHULQJ GXULQJ D UHIUHVK SHULRG SURWRFRO RYHUKHDG RI ,*03 Y IRU ERWK FDVHV LV DSSUR[LPDWHO\ HTXDO WR  E\WHV JURXS VL]H RU KRVW QXPEHU JURXS QXPEHUV ZKLOH WKDW RI 5*03 LV DSSUR[LPDWHO\ HTXDO WR  E\WHV JURXS

                 +RVW QXPEHU 3URWRFRO RYHUKHDG.%\WH 5*03 ,*03Y ,*03Y ,*03Y                   +RVW QXPEHU 3URWRFRO RYHUKHDG.%\WH 5*03 ,*03Y

 QXPEHUV

D :LWKRXW VRXUFH ILOWHULQJ E :LWK VRXUFH ILOWHULQJ )LJXUH  *URXS VL]H YV SURWRFRO RYHUKHDG

 *URXS QXPEHU

D 3URWRFRO RYHUKHDG QR 6) E (IILFLHQF\ QR 6)

F 3URWRFRO RYHUKHDG 6) G (IILFLHQF\ 6) )LJXUH  *URXS QXPEHU YV SURWRFRO RYHUKHDG 5HVXOWV DUH PHDVXUHG RYHU  KRVWV SDUWLFLSDWLQJ LQ DQ\ JURXS ZLWK JURXS QXPEHU RQ D /$1 YDU\LQJ IURP  WR  )LJXUH  D DQG  E VKRZV WKH UHVXOWV ZLWKRXW VRXUFH ILOWHULQJ DQG )LJXUH  F DQG  G ZLWK VRXUFH ILOWHULQJ )LJXUH  E DQG )LJXUH  G VKRZ WKH HIILFLHQF\ RI 5*03 FRPSDUHG WR ,*03 Y ZLWKRXW DQG ZLWK VRXUFH ILOWHULQJ 6) UHVSHFWLYHO\ ZKHUH HIILFLHQF\ LV GHILQHG DV IROORZV

(IILFLHQF\ 5*03 RYHUKHDG  ,*03 Y RYHUKHDG 7KH KLJKHU WKH HIILFLHQF\ WKH EHWWHU WKH SHUIRUPDQFH LPSURYHPHQW RI 5*03 RYHU WKDW RI ,*03 Y IRU WKH VSHFLILF FRPSDULVRQ LWHP )RU H[DPSOH [ RI HIILFLHQF\ PHDQV WKDW EDQGZLGWK UHTXLUHPHQW RI 5*03 LV RQO\ [ RI WKDW ,*03 Y

)LJXUH  VKRZV WKDW WKH RYHUKHDG RI ERWK ,*03 Y DQG 5*03 LQFUHDVHV DV JURXS QXPEHU LQFUHDVHV +RZHYHU WKH RYHUKHDG RI ,*03 Y LQFUHDVHV PRUH UDSLGO\ WKDQ

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 &RQVLGHULQJ WKH RQH ZLWKRXW VRXUFH ILOWHULQJ GXULQJ D UHIUHVK SHULRG SURWRFRO RYHUKHDG RI ,*03 Y LV DSSUR[LPDWHO\ HTXDO WR   E\WHV JURXS QXPEHUV DQG WKDW RI 5*03 LV DSSUR[LPDWHO\ HTXDO WR  E\WHV JURXS QXPEHUV JLYLQJ DQ RYHUKHDG UDWLR RI 

 -RLQGHSDUWXUH UDWH RI D JURXS

D 3URWRFRO RYHUKHDG QR 6) E (IILFLHQF\ QR 6)

F 3URWRFRO RYHUKHDG 6) G (IILFLHQF\  6) )LJXUH  -RLQOHDYH UDWH YV SURWRFRO RYHUKHDG 5HVXOWV DUH PHDVXUHG RYHU  KRVWV ZLWK HDFK DW PRVW SDUWLFLSDWLQJ LQ  JURXSV ZLWK DYHUDJH MRLQGHSDUWXUH UDWH RI D JURXS YDU\LQJ IURP  WR  SHU PLQXWH )LJXUH  D DQG  E VKRZ WKH UHVXOWV ZLWKRXW VRXUFH ILOWHULQJ DQG )LJXUH  F DQG  G ZLWK VRXUFH ILOWHULQJ ,W FDQ EH REVHUYHG WKDW DV λ LV YHU\ KLJK WKHUH LV DOPRVW QR SHULRGLFDO UHIUHVK PHVVDJH VHQW EHFDXVH MRLQOHDYH PHVVDJHV UHVHW UHIUHVK WLPHUV DOO DORQJ DQG WKXV HIILFLHQF\ RI SHULRGLFDO UHIUHVK UHDFKHV  $V D UHVXOW SURWRFRO RYHUKHDG RI SHULRGLFDO UHIUHVK PHVVDJHV                  *URXS VL]H 3URWRFRO RYHUKHDG.%\WH 5*03 ,*03Y ,*03Y ,*03Y             *URXS VL]H 3URWRFRO RYHUKHDG.%\WH 5*03 ,*03Y                  *URXS QXPEHU 3URWRFRO RYHUKHDG.%\WH 5*03 ,*03Y ,*03Y ,*03Y            -RLQOHDYH UDWHPLQ 3URWRFRO RYHUKHDG.E\WH 5*03 ,*03Y            -RLQOHDYH UDWHPLQ (IILFLHQF\ 7RWDO -RLQOHDYH 5HIUHVK           -RLQOHDYH UDWHPLQ 3URWRFRO RYHUKHDG.%\WH 5*03 ,*03Y ,*03Y ,*03Y           -RLQOHDYH UDWHPLQ (IILFLHQF\ 7RWDO -RLQ DQG OHDYH 5HIUHVK             *URXS QXPEHU 3URWRFRO RYHUKHDG.%\WH 5*03 ,*03Y                   *URXS QXPEHU (IILFLHQF\ _7RWDO -RLQOHDYH 5HIUHVK             *URXS QXPEHU (IILFLHQF\ 7RWDO -RLQOHDYH 5HIUHVK

 GRPLQDWHV WKH RYHUDOO SHUIRUPDQFH ZKHQ λ LV VPDOO DQG WKDW RI MRLQOHDYH PHVVDJHV GRPLQDWHV WKH SHUIRUPDQFH DV λ LQFUHDVHV

 3HUFHQWDJH RI KRVWV ZLWK VRXUFH ILOWHULQJ RQ D

/$1

D 3URWRFRO RYHUKHDG E (IILFLHQF\ )LJXUH  6RXUFH ILOWHULQJ 3HUFHQWDJH YV SURWRFRO RYHUKHDG 5HVXOWV DUH PHDVXUHG RYHU  KRVWV ZLWK HDFK DW PRVW SDUWLFLSDWLQJ LQ  JURXSV DQG HDFK DW PRVW KDYLQJ  GLIIHUHQW VRXUFHV SHU JURXS ZLWK WKH SHUFHQWDJH RI KRVWV ZLWK VRXUFH ILOWHULQJ RQ D /$1 YDU\LQJ IURP  WR  6XUSULVLQJO\ ZKHQ  RI KRVWV ZLWK VRXUFH ILOWHULQJ HIILFLHQF\ RI 5*03 RYHU ,*03 Y LV DERYH  (YHQ ZKHQ DOO KRVWV RQ D /$1 KDYH VRXUFH ILOWHULQJ QDPHO\  RI KRVWV ZLWK VRXUFH ILOWHULQJ HIILFLHQF\ RI 5*03 RYHU ,*03 Y LV VWLOO RYHU 

 3URWRFRO RYHUKHDG GLVWULEXWLRQ RYHU WLPH

D :LWKRXW VRXUFH ILOWHULQJ E :LWK VRXUFH ILOWHULQJ )LJXUH  3URWRFRO RYHUKHDG GLVWULEXWLRQ RYHU WLPH

D :LWKRXW VRXUFH ILOWHULQJ E :LWK VRXUFH ILOWHULQJ )LJXUH  3URWRFRO RYHUKHDG GLVWULEXWLRQ RYHU DQ LQWHUYDO )LJXUH  VKRZV SURWRFRO RYHUKHDG GLVWULEXWLRQ RYHU WLPH DQG )LJXUH  VKRZV D GLVWULEXWLRQ RYHU DQ LQWHUYDO %RWK

ILJXUHV GHSLFW WKDW 5*03 FRQVLVWHQWO\ KDV OHVV WRWDO SURWRFRO RYHUKHDG RYHU WKH VLPXODWLRQ WLPH DQG WKH UHSRUW PHVVDJHV DUH GLVWULEXWHG VPRRWKO\ RYHU WLPH UDWKHU WKDQ DV SHULRGLFDO EXUVWV DV LQ ,*03 WKDQNV WR WKH UHFHLYHULQLWLDWHG DQG VHOIV\QFKURQL]HG UHIUHVK WLPHU PHFKDQLVP



&RQFOXVLRQV DQG )XWXUH :RUN

,Q WKLV SDSHU ZH KDYH SURSRVHG D QHZ JURXS PDQDJHPHQW SURWRFRO FDOOHG 5*03 IRU ,3 PXOWLFDVWLQJ 7KH SURWRFRO FKDUDFWHULVWLFV ZHUH GHVFULEHG DQG WKH PHFKDQLVP RI WKH SURWRFRO ZDV SUHVHQWHG &RPSDULVRQV WR ,*03 ZHUH PDGH WR KLJKOLJKW WKH DGYDQWDJHV RI WKH SURSRVHG DSSURDFK LQ WHUPV RI SHUIRUPDQFH DGDSWLYLW\ VFDODELOLW\ DQG FDSDELOLW\ WR VHUYH DV D JURXS PDQDJHPHQW SURWRFRO RI ,3 PXOWLFDVWLQJ IRU D ZLGH YDULHW\ RI ,QWHUQHW VHUYLFHV

$FNQRZOHGJHPHQW

7KLV ZRUN LV VXSSRUWHG E\ WKH 1DWLRQDO 6FLHQFH &RXQFLO 7DLZDQ XQGHU JUDQW QXPEHU 16& (

5HIHUHQFHV

>@ 0 + $PPDU * 3RO\]RV DQG 6 7ULSDWKL ³6SHFLDO

LVVXH RQ QHWZRUNHG VXSSRUW IRU PXOWLSRLQW

FRPPXQLFDWLRQV´ ,((( -6$& YRO  $SULO  >@ - & 3DVTXDOH * & 3RO\]RV DQG ;\ORPHQRV ³7KH

0XOWLFDVWLQJ 3UREOHP´ $&0 0XOWLPHGLD 6\VWHPV YRO  R   SS 

>@ 6 'HHULQJ & 3DUWULJH DQG ' :DLW]PDQ ³'LVWDQFH 9HFWRU 0XOWLFDVW 5RXWLQJ 3URWRFRO´ ,(7) 5)&  >@ - 0R\ ³0XOWLFDVW 5RXWLQJ ([WHQVLRQV IRU 263)´

&RPPXQLFDWLRQ RI WKH $&0 YRO  QR  SS  $XJ 

>@ $ %DOODUDGLH - &URZFURIW DQG 3 )UDQFLV ³&RUH %DVHG 7UHH &%7 ± $Q $UFKLWHFWXUH IRU 6FDODEOH ,QWHU 'RPDLQ 5RXWLQJ 3URWRFRO´ $&0 6,*&20 ¶ 2FW  SS 

>@ 6 'HHULQJ ' (VWULQ ' )DLUQDFFL 9 -DFREVRQ & /LX DQG / :HL ³$Q $UFKLWHFWXUH IRU :LGH$UHD 0XOWLFDVW 5RXWLQJ´ $&0 6,*&200 ¶ SS  >@ 6 'HHULQJ ³+RVW ([WHQVLRQV IRU ,3 0XOWLFDVWLQJ´

,(7) 5)&  $XJ 

>@ : )HQQHU ³,QWHUQHW *URXS 0DQDJHPHQW 3URWRFRO 9HUVLRQ ´ ,(7) 5)&  1RY 

>@ % &DLQ 6 'HHULQJ DQG $ 7K\DJDUDMDQ ³,QWHUQHW *URXS 0DQDJHPHQW 3URWRFRO 9HUVLRQ´ ,(7) ,QWHUQHW GUDIW )HE  :RUN LQ SURJUHVV

           6RXUFH SUREDELOLW\ 3URWRFRO RYHUKHDG.%\WH 5*03 ,*03Y             6RXUFH SUREDELOLW\ (IILFLHQF\ _7RWDO -RLQOHDYH 5HIUHVK