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Contract Design for Composed Services in a Cloud Computing Environment

  • Sonja Brangewitz
  • Claus-Jochen Haake
  • Jochen Manegold
Conference paper
Part of the Communications in Computer and Information Science book series (CCIS, volume 508)

Abstract

In this paper, we study markets in which sellers and buyers interact with each other via an intermediary. Our motivating example is a market with a cloud infrastructure where single services are flexibly combined to composed services. We address the contract design problem of an intermediary to purchase complementary single services. By using a non-cooperative game-theoretic model, we analyze the incentives for high- and low-quality composed services to be an equilibrium outcome of the market. It turns out that equilibria with low quality can be obtained in the short run and in the long run, whereas those with high quality can only be achieved in the long run. In our analysis we explicitly determine the according discount factors needed in an infinitely repeated game. Furthermore, we derive optimal contracts for the supply of high- and low-quality composed services.

Keywords

Composed services Contract design Cloud computing Service quality Asymmetric information Repeated games 

Supplementary material

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Copyright information

© Springer International Publishing Switzerland 2015

Authors and Affiliations

  • Sonja Brangewitz
    • 1
  • Claus-Jochen Haake
    • 1
  • Jochen Manegold
    • 1
  1. 1.Department of EconomicsUniversity of PaderbornPaderbornGermany

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