A Non-cooperative Game-Theoretic Framework for Sponsoring Content in the Internet Market

Data traffic demand over the Internet is increasing rapidly, and it is changing the pricing model between internet service providers (ISPs), content providers (CPs) and end users. One recent pricing proposal is sponsored data plan, i.e., when CP negotiates with the ISP on behalf of the users to remove the network subscription fees so as to attract more users and increase the number of advertisements. As such, a key challenge is how to provide proper sponsorship in the situation of complex interactions among the telecommunication actors, namely, the advertisers, the content provider, and users. To answer those questions, we explore the potential economic impacts of this new pricing model by modeling the interplay among the advertiser, users, and the CPs in a game theoretic framework. The CP may have either a subscription revenue model (charging end-users) or an advertisement revenue model (charging advertisers). In this work, we design and analyze the interaction among CPs having an advertisement revenue as a non-cooperative game, where each CP determines the proportion of data to sponsor and a level of credibility of content. In turn, the end-users demand for the content of a CP depends not only on their strategies but also upon those proposed by all of its competitors. Through rigorous mathematical analysis, we prove the existence and uniqueness of the Nash equilibrium. Based on the analysis of the game properties, we propose an iterative algorithm, which guarantees to converge to the Nash equilibrium point in a distributed manner. Numerical investigation shows the convergence of a proposed algorithm to the Nash equilibrium point and corroborates the fact that sponsoring content may improve the CPs outcome

Network Non-neutrality Debate: An Economic Analysis

This paper studies the economic utilities and the quality of service (QoS) in a two-sided non-neutral market where Internet service providers (ISPs) charge content providers (CPs) for the content delivery. We propose new models on a two-sided market which involves a CP, an ISP, end users and advertisers. The CP may have either the subscription revenue model (charging end users) or the advertisement revenue model (charging advertisers). We formulate the interactions between the ISP and the CP as a noncooperative game problem for the former and an optimization problem for the latter. Our analysis shows that the revenue model of the CP plays a significant role in a non-neutral Internet. With the subscription model, both the ISP and the CP receive better (or worse) utilities as well as QoS in the presence of side payment at the same time. However, with the advertisement model, the side payment impedes the CP from investing on its contents.Comment: 15 pages, 10 figure

Essays on the Theory of Two-Sided Markets

Several markets have emerged in which consumers and sellers interact and make transactions through an intermediary or platform. Examples include smart phones, bank cards, game consoles, shopping centers but even airports. The peculiarity of these markets is that the actors join them because the platforms have a large number of members of either their own or the other segment. Such markets are referred to in the literature as two-sided markets, which, through the development of technology, have now appeared in many forms in our daily lives. Although the analysis of two-sided markets is already extensive, it still has unexplored areas. In addition, due to their different functioning from traditional markets, they are also of great interest from a regulatory point of view, whereas the impact of the regulatory tools used may be different and may be particularly harmful in some cases. The chapters in this thesis contribute to a better understanding of two-sided markets. The results presented in the different chapters are not closely related, so they can be interpreted independently. In each chapter, duopolistic models are presented to determine the impact of platforms' product differentiation decisions, the use of public and private contracts, and the entry of the state in the market on optimal pricing. Because consumers typically do not consider when purchasing a platform's product or service that they will later purchase compatible products, they do not internalize the benefits of their future consumption, so the models presented are sequential in nature. To analyze these and determine their equilibrium, the tools of game theory are used. Depending on the type of model, the aim is to determine the subgame-perfect Nash equilibrium or the symmetric perfect Bayesian equilibrium. In the dissertation, the following results can be highlighted: 1. Profit-maximizing platforms provide users with either maximum customizability at a positive price or somewhat limited customizability at a zero price, depending on the utility from consumption. 2. Leveraging the dominance of a platform from market power is somewhat hampered by the possibility of customization. In two-sided markets, competition on one side of the market will automatically spread to the other side of the market and, if not in terms of prices, will have an impact on some other dimension. 3. In the case of public contracts, the platforms and the consumers prefer the case when sellers decide on multi-homing. 4. Beliefs are not affected by the relationship between platform-specific products for competing platforms. 5. In the case of competing platforms, the use of private contracts changes the pricing strategy of the platforms on the seller side: a positive price is charged for the previously supported segment. However, on the consumer side, a positive price is still set, in contrast to the result obtained in the literature, where consumers were supported by the platforms. In contrast, the subscription fee for private contracts is lower than for public contracts. 6. As a result of the franchise fee included in the private contract, the sellers set collusive prices. 7. Private platforms are encouraged to use public contracts, while for consumers, the preferred output is a function of the network effect, the transportation cost, and the relationship between products. 8. Neither service provider's decision to differentiate a product in the case of mixed duopoly is influenced by the competitor's decision, while on the consumer side, as a result of competition, subscription fees converge. 9. With the abolition of the state platform, the strategy of regulation of entry will lose its strength in the case of two-sided markets

Open Access to Telecommunications Infrastructure and Digital Services: Competition, Cooperation and Regulation

Open Access, defined as the non-discriminatory access to an upstream bottleneck resource, takes a central role in information and communications technology markets. This thesis investigates the competitive and cooperative interactions in these markets, where firms require access to an essential input resource. Theoretical analyses and experimental evaluations are employed to examine market outcomes under alternative regulatory institutions and voluntary access agreements

Telecommunication Economics

This book constitutes a collaborative and selected documentation of the scientific outcome of the European COST Action IS0605 Econ@Tel "A Telecommunications Economics COST Network" which run from October 2007 to October 2011. Involving experts from around 20 European countries, the goal of Econ@Tel was to develop a strategic research and training network among key people and organizations in order to enhance Europe's competence in the field of telecommunications economics. Reflecting the organization of the COST Action IS0605 Econ@Tel in working groups the following four major research areas are addressed: - evolution and regulation of communication ecosystems; - social and policy implications of communication technologies; - economics and governance of future networks; - future networks management architectures and mechanisms

Telecommunication Economics

This book constitutes a collaborative and selected documentation of the scientific outcome of the European COST Action IS0605 Econ@Tel "A Telecommunications Economics COST Network" which run from October 2007 to October 2011. Involving experts from around 20 European countries, the goal of Econ@Tel was to develop a strategic research and training network among key people and organizations in order to enhance Europe's competence in the field of telecommunications economics. Reflecting the organization of the COST Action IS0605 Econ@Tel in working groups the following four major research areas are addressed: - evolution and regulation of communication ecosystems; - social and policy implications of communication technologies; - economics and governance of future networks; - future networks management architectures and mechanisms