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A Stackelberg game-based approach for interactions among Internet service providers and content providers

Author

Listed:
  • Hamid Garmani

    (Sultan Moulay Slimane University)

  • Mohamed Amrani

    (Sultan Moulay Slimane University)

  • Mohamed Baslam

    (Sultan Moulay Slimane University)

  • Rachid Ayachi

    (Sultan Moulay Slimane University)

  • Mostafa Jourhmane

    (Sultan Moulay Slimane University)

Abstract

This paper studies non-neutral market share where Internet service providers (ISPs) charge content providers (CPs) for the content delivery. Each provider seeks to maximize its own profit by determining its price and their service qualities (quality of service and credibility of content). First, we utilize a Stackelberg game to study the interactions between ISPs and CPs. We formulate the interactions among multiple ISPs (multiple CPs) as a non-cooperative game. In turn, the subscribers’ demand for the service of a provider depends not only on their strategies, but also upon those proposed by all of its competitors. Then we provide some interesting results regarding the Nash equilibrium of this game. More precisely, we show existence and uniqueness of the Nash equilibrium under some conditions. An iterative and distributed algorithm based on best response dynamics is proposed to achieve the equilibrium point; additionally, in order to quantify how efficient the Nash equilibrium point is, a detailed analysis of the Price of Anarchy is adopted to evaluate the performance of the system at equilibrium. Finally, extensive simulations show convergence of a proposed schema to the Nash equilibrium and show the effect of side payment on providers’ policies and the effect of bandwidth cost on ISPs’ policies.

Suggested Citation

  • Hamid Garmani & Mohamed Amrani & Mohamed Baslam & Rachid Ayachi & Mostafa Jourhmane, 2019. "A Stackelberg game-based approach for interactions among Internet service providers and content providers," Netnomics, Springer, vol. 20(2), pages 101-128, December.
    • Handle: RePEc:kap:netnom:v:20:y:2019:i:2:d:10.1007_s11066-019-09136-1
    DOI: 10.1007/s11066-019-09136-1
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    References listed on IDEAS

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    1. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, April.
    2. Eric Maskin, 1999. "Nash Equilibrium and Welfare Optimality," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 66(1), pages 23-38.
    3. Anna Nagurney & Dong Li & Sara Saberi & Tilman Wolf, 2014. "A Dynamic Network Economic Model of a Service-Oriented Internet with Price and Quality Competition," Springer Optimization and Its Applications, in: Valery A. Kalyagin & Panos M. Pardalos & Themistocles M. Rassias (ed.), Network Models in Economics and Finance, edition 127, pages 239-264, Springer.
    4. Laffont, Jean-Jacques & Marcus, Scott & Rey, Patrick & Tirole, Jean, 2003. "Internet Interconnection and the Off-Net-Cost Pricing Principle," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 370-390, Summer.
    5. Anna Nagurney & Dong Li & Tilman Wolf & Sara Saberi, 2013. "A network economic game theory model of a service-oriented internet with choices and quality competition," Netnomics, Springer, vol. 14(1), pages 1-25, November.
    6. M'hamed Outanoute & Mohamed Baslam & Belaid Bouikhalene, 2015. "Genetic Algorithm Learning of Nash Equilibrium: Application on Price-QoS Competition in Telecommunications Market," Journal of Electronic Commerce in Organizations (JECO), IGI Global, vol. 13(3), pages 1-14, July.
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    Cited by:

    1. Ghosh, Souvik & Hassin, Refael, 2021. "Inefficiency in stochastic queueing systems with strategic customers," European Journal of Operational Research, Elsevier, vol. 295(1), pages 1-11.

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