1,327 research outputs found
Equilibria and price of anarchy in parallel relay networks with node pricing
Abstract—We study pricing games in single-layer relay net-works where the source routes traffic selfishly according to the strategic bids made by relays. Each relay’s bid includes a charging function and a proposed traffic share. Relays aim to maximize their individual profit from forwarding traffic. We show that the socially optimal traffic allocation can always be induced by an equilibrium where no relay can increase its profit by unilaterally changing its bids. Inefficient equilibria arise due to the monopolistic pricing power of a superior relay. This lead to a finite price of anarchy if marginal cost functions are concave, and an unbounded price of anarchy when the marginal cost functions are convex. I
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
Robust Quantitative Comparative Statics for a Multimarket Paradox
We introduce a quantitative approach to comparative statics that allows to
bound the maximum effect of an exogenous parameter change on a system's
equilibrium. The motivation for this approach is a well known paradox in
multimarket Cournot competition, where a positive price shock on a monopoly
market may actually reduce the monopolist's profit. We use our approach to
quantify for the first time the worst case profit reduction for multimarket
oligopolies exposed to arbitrary positive price shocks. For markets with affine
price functions and firms with convex cost technologies, we show that the
relative profit loss of any firm is at most 25% no matter how many firms
compete in the oligopoly. We further investigate the impact of positive price
shocks on total profit of all firms as well as on social welfare. We find tight
bounds also for these measures showing that total profit and social welfare
decreases by at most 25% and 16.6%, respectively. Finally, we show that in our
model, mixed, correlated and coarse correlated equilibria are essentially
unique, thus, all our bounds apply to these game solutions as well.Comment: 23 pages, 1 figur
Equilibrium Computation in Resource Allocation Games
We study the equilibrium computation problem for two classical resource
allocation games: atomic splittable congestion games and multimarket Cournot
oligopolies. For atomic splittable congestion games with singleton strategies
and player-specific affine cost functions, we devise the first polynomial time
algorithm computing a pure Nash equilibrium. Our algorithm is combinatorial and
computes the exact equilibrium assuming rational input. The idea is to compute
an equilibrium for an associated integrally-splittable singleton congestion
game in which the players can only split their demands in integral multiples of
a common packet size. While integral games have been considered in the
literature before, no polynomial time algorithm computing an equilibrium was
known. Also for this class, we devise the first polynomial time algorithm and
use it as a building block for our main algorithm.
We then develop a polynomial time computable transformation mapping a
multimarket Cournot competition game with firm-specific affine price functions
and quadratic costs to an associated atomic splittable congestion game as
described above. The transformation preserves equilibria in either games and,
thus, leads -- via our first algorithm -- to a polynomial time algorithm
computing Cournot equilibria. Finally, our analysis for integrally-splittable
games implies new bounds on the difference between real and integral Cournot
equilibria. The bounds can be seen as a generalization of the recent bounds for
single market oligopolies obtained by Todd [2016].Comment: This version contains some typo corrections onl
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