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A Dynamic Network Economic Model of a Service-Oriented Internet with Price and Quality Competition

In: Network Models in Economics and Finance

Author

Listed:
  • Anna Nagurney

    (University of Massachusetts
    University of Gothenburg)

  • Dong Li

    (University of Massachusetts)

  • Sara Saberi

    (University of Massachusetts)

  • Tilman Wolf

    (University of Massachusetts)

Abstract

In this paper, we develop a dynamic network economic model of a service-oriented Internet with price and quality competition using projected dynamical systems theory. This research, is motivated, in part, by the Future Generation Internet (FGI), which will need to handle a spectrum of requirements of next-generation applications. The decision-makers are the content providers and the transport network providers who select the prices that they charge as well as the quality levels of their content and network provision, respectively. Consumers, that is, users at the demand markets, respond through the demand functions which reflect the attractiveness of the composition of content and network services as reflected by the prices charged and the quality levels. We prove that the stationary points of the projected dynamical system coincide with the set of solutions of a variational inequality problem and provide qualitative analysis, including stability analysis results. In addition, we describe an algorithm, which yields a discrete-time approximation of the continuous-time adjustment processes until a stationary point, equivalently, an equilibrium, is achieved. The computational procedure is then applied to solve numerical examples in order to demonstrate the generality of the framework.

Suggested Citation

  • 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.
    • Handle: RePEc:spr:spochp:978-3-319-09683-4_12
    DOI: 10.1007/978-3-319-09683-4_12
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    Citations

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    Cited by:

    1. 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.
    2. Li, Dong & Nagurney, Anna, 2015. "A general multitiered supply chain network model of quality competition with suppliers," International Journal of Production Economics, Elsevier, vol. 170(PA), pages 336-356.
    3. Nagurney, Anna & Saberi, Sara & Shukla, Shivani & Floden, Jonas, 2015. "Supply chain network competition in price and quality with multiple manufacturers and freight service providers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 77(C), pages 248-267.
    4. Chen, Xu & Li, Shanshan & Wang, Xiaojun, 2020. "Evaluating the effects of quality regulations on the pharmaceutical supply chain," International Journal of Production Economics, Elsevier, vol. 230(C).
    5. Garmani, Hamid & Ait Omar, Driss & El Amrani, Mohamed & Baslam, Mohamed & Jourhmane, Mostafa, 2020. "Analysis of a dynamics duopoly game with two content providers," Chaos, Solitons & Fractals, Elsevier, vol. 131(C).
    6. Dragicevic, Arnaud Z. & Barkaoui, Ahmed, 2017. "Forest-based industrial network: Case of the French timber market," Forest Policy and Economics, Elsevier, vol. 75(C), pages 23-33.

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