1 research outputs found
Strategic Interaction Among Different Entities in Internet of Things
The economic model of the Internet of Things (IoT) consists of end users,
advertisers and three different kinds of providers--IoT service provider
(IoTSP), Wireless service provider (WSP) and cloud service provider (CSP). We
investigate three different kinds of interactions among the providers. First,
we consider that the IoTSP prices a bundled service to the end-users, and the
WSP and CSP pay the IoTSP (push model). Next, we consider the model where the
end-users independently pay the each provider (pull model). Finally, we
consider a hybrid model of the above two where the IoTSP and WSP quote their
prices to the end-users, but the CSP quotes its price to the IoTSP.
We characterize and quantify the impact of the advertisement revenue on the
equilibrium pricing strategy and payoff of providers, and corresponding demands
of end users in each of the above interaction models. Our analysis reveals that
the demand of end-users, and the payoffs of the providers are non decreasing
functions of the advertisement revenue. For sufficiently high advertisement
revenue, the IoTSP will offer its service free of cost in each interaction
model. However, the payoffs of the providers, and the demand of end-users vary
across different interaction models. Our analysis shows that the demand of
end-users, and the payoff of the WSP are the highest in the pull (push, resp.)
model in the low (high, resp.) advertisement revenue regime. The payoff of the
IoTSP is always higher in the pull model irrespective of the advertisement
revenue. The payoff of the CSP is the highest in the hybrid model in the low
advertisement revenue regime. However, in the high advertisement revenue regime
the payoff of the CSP in the hybrid model or in the push model can be higher
depending on the equilibrium chosen in the push model.Comment: Submitted in IEEE Transactions on Automatic Contro