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Pricing and Revenue Sharing Between ISPs Under Content Sponsoring

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Abstract

As sponsored data with subsidized access cost gains popularity in industry, it is essential to understand its impact on the Internet service market. We investigate the interplay among Internet Service Providers (ISPs), Content Provider (CP) and End User (EU), where each player is selfish and wants to maximize its own profit. In particular, we consider multi-ISP scenarios, in which the network connectivity between the CP and the EU is jointly provided by multiple ISPs. We first model non-cooperative interaction between the players as a four-stage Stackelberg game, and derive the optimal behaviors of each player in equilibrium. Taking into account the transit price at intermediate ISP, we provide in-depth understanding on the sponsoring strategies of CP. We then study the effect of cooperation between the ISPs to the pricing structure and the traffic demand, and analyze their implications to the players. We further build our revenue sharing model based on Shapley value mechanism, and show that the collaboration of the ISPs can improve their total payoff with a higher social welfare.

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Notes

  1. In general, the traffic delivery cost is unlikely to be a linear function of the traffic amount. However, in this work, we focus on the traffic change from the CP of our interest, assuming that it does not substantially change the total traffic amount in the network. In this case, the marginal delivery cost of the traffic can be approximated as a linear function with a marginal cost parameter.

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Acknowledgements

This work was supported by the NRF grants funded by the Korea government (MSIT) (No. NRF-2017R1E1A1A03070524 and NRF-2017K1A3A1A19070720). C. Joo is the corresponding author. An earlier version of this work has been presented at GAMENETS’18 [30].

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  1. Ulsan National Institute of Science and Technology (UNIST), Ulsan, 44919, South Korea

    Abylay Satybaldy & Changhee Joo

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  1. Abylay Satybaldy
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  2. Changhee Joo
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Correspondence to Changhee Joo.

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Satybaldy, A., Joo, C. Pricing and Revenue Sharing Between ISPs Under Content Sponsoring. Mobile Netw Appl 26, 501–511 (2021). https://doi.org/10.1007/s11036-018-1126-8

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