The effect of competition among brokers on the quality and price of differentiated internet services

Price war, as an important factor in undercutting competitors and attracting customers, has spurred considerable work that analyzes such conflict situation. However, in most of these studies, quality of service (QoS), as an important decision-making criterion, has been neglected. Furthermore, with the rise of service-oriented architectures, where players may offer different levels of QoS for different prices, more studies are needed to examine the interaction among players within the service hierarchy. In this paper, we present a new approach to modeling price competition in (virtualized) service-oriented architectures, where there are multiple service levels. In our model, brokers, as the intermediaries between end-users and service providers, offer different QoS by adapting the service that they obtain from lower-level providers so as to match the demands of their clients to the services of providers. To maximize profit, players, i.e. providers and brokers, at each level compete in a Bertrand game while they offer different QoS. To maintain an oligopoly market, we then describe underlying dynamics which lead to a Bertrand game with price constraints at the providers' level. Numerical simulations demonstrate the behavior of brokers and providers and the effect of price competition on their market shares.This work has been partly supported by National Science Foundation awards: CNS-0963974, CNS-1346688, CNS-1536090 and CNS-1647084

Cloud/fog computing resource management and pricing for blockchain networks

The mining process in blockchain requires solving a proof-of-work puzzle, which is resource expensive to implement in mobile devices due to the high computing power and energy needed. In this paper, we, for the first time, consider edge computing as an enabler for mobile blockchain. In particular, we study edge computing resource management and pricing to support mobile blockchain applications in which the mining process of miners can be offloaded to an edge computing service provider. We formulate a two-stage Stackelberg game to jointly maximize the profit of the edge computing service provider and the individual utilities of the miners. In the first stage, the service provider sets the price of edge computing nodes. In the second stage, the miners decide on the service demand to purchase based on the observed prices. We apply the backward induction to analyze the sub-game perfect equilibrium in each stage for both uniform and discriminatory pricing schemes. For the uniform pricing where the same price is applied to all miners, the existence and uniqueness of Stackelberg equilibrium are validated by identifying the best response strategies of the miners. For the discriminatory pricing where the different prices are applied to different miners, the Stackelberg equilibrium is proved to exist and be unique by capitalizing on the Variational Inequality theory. Further, the real experimental results are employed to justify our proposed model.Comment: 16 pages, double-column version, accepted by IEEE Internet of Things Journa

A Game-theoretic Framework for Revenue Sharing in Edge-Cloud Computing System

We introduce a game-theoretic framework to ex- plore revenue sharing in an Edge-Cloud computing system, in which computing service providers at the edge of the Internet (edge providers) and computing service providers at the cloud (cloud providers) co-exist and collectively provide computing resources to clients (e.g., end users or applications) at the edge. Different from traditional cloud computing, the providers in an Edge-Cloud system are independent and self-interested. To achieve high system-level efficiency, the manager of the system adopts a task distribution mechanism to maximize the total revenue received from clients and also adopts a revenue sharing mechanism to split the received revenue among computing servers (and hence service providers). Under those system-level mechanisms, service providers attempt to game with the system in order to maximize their own utilities, by strategically allocating their resources (e.g., computing servers). Our framework models the competition among the providers in an Edge-Cloud system as a non-cooperative game. Our simulations and experiments on an emulation system have shown the existence of Nash equilibrium in such a game. We find that revenue sharing mechanisms have a significant impact on the system-level efficiency at Nash equilibria, and surprisingly the revenue sharing mechanism based directly on actual contributions can result in significantly worse system efficiency than Shapley value sharing mechanism and Ortmann proportional sharing mechanism. Our framework provides an effective economics approach to understanding and designing efficient Edge-Cloud computing systems

A Competition-based Pricing Strategy in Cloud Markets using Regret Minimization Techniques

Cloud computing as a fairly new commercial paradigm, widely investigated by different researchers, already has a great range of challenges. Pricing is a major problem in Cloud computing marketplace; as providers are competing to attract more customers without knowing the pricing policies of each other. To overcome this lack of knowledge, we model their competition by an incomplete-information game. Considering the issue, this work proposes a pricing policy related to the regret minimization algorithm and applies it to the considered incomplete-information game. Based on the competition based marketplace of the Cloud, providers update the distribution of their strategies using the experienced regret. The idea of iteratively applying the algorithm for updating probabilities of strategies causes the regret get minimized faster. The experimental results show much more increase in profits of the providers in comparison with other pricing policies. Besides, the efficiency of a variety of regret minimization techniques in a simulated marketplace of Cloud are discussed which have not been observed in the studied literature. Moreover, return on investment of providers in considered organizations is studied and promising results appeared

A Study of Competitive Cloud Resource Pricing under a Smart Grid Environment

In the current IaaS cloud market, to achieve profit maximization, multiple cloud providers compete non-cooperatively by offering diverse price rates. At the same time, tenant consumers judiciously adjust demands accordingly, which in turn affects cloud resource prices. In this paper, we tackle this fundamental but daunting cloud price competition problem with Bertrand game modeling, and propose a dynamic game to achieve Nash equilibrium in a distributed manner. Specifically, we realistically consider spot electricity prices under a smart grid environment, and systematically investigate the impact of different system parameters such as network delay, renewable availability, and cloud resource substitutability. We also perform stability analysis to investigate the convergence of the proposed dynamic game to Nash equilibrium. Cooperation among cloud providers can achieve aggregate cloud profit maximization, but is subject to strategic manipulations. We then propose our Striker strategy to stimulate cooperation, the efficiency of which is validated by repeated game analysis. Our evaluation is augmented with realistic electricity prices in the spot energy market, and reveals insightful observations for both theoretic analysis and practical pricing scheme design.published_or_final_versio

Dynamic Pricing of Applications in Cloud Marketplaces using Game Theory

The competitive nature of Cloud marketplaces as new concerns in delivery of services makes the pricing policies a crucial task for firms. so that, pricing strategies has recently attracted many researchers. Since game theory can handle such competing well this concern is addressed by designing a normal form game between providers in current research. A committee is considered in which providers register for improving their competition based pricing policies. The functionality of game theory is applied to design dynamic pricing policies. The usage of the committee makes the game a complete information one, in which each player is aware of every others payoff functions. The players enhance their pricing policies to maximize their profits. The contribution of this paper is the quantitative modeling of Cloud marketplaces in form of a game to provide novel dynamic pricing strategies; the model is validated by proving the existence and the uniqueness of Nash equilibrium of the game