WLAN Service Providers' Price Competition with Uncertainty in User Demand

In this letter, uncertainty in users' network selection is modeled by a Markov chain. In the presence of such uncertainty, the price competition game of wireless local area network (WLAN) service providers (SPs) is analyzed and the existence of Bayesian Nash equilibrium is proved. Using the price of anarchy as a metric of efficiency for social welfare maximization, it is shown that an increase in competition does not result in significant losses in efficiency. Compared to a monopoly, an unregulated duopoly of WLAN SPs is recommended as it results in a more equitable distribution of surplus amongst the SPs and the users.

[1]  Yu-Kwong Kwok,et al.  Analysis of Duopoly Price Competition Between WLAN Providers , 2009, 2009 IEEE International Conference on Communications.

[2]  Ariel Rubinstein,et al.  A Course in Game Theory , 1995 .

[3]  Seong-Lyun Kim,et al.  Price War in Wireless Access Networks: A Regulation for Convergence , 2011, 2011 IEEE Global Telecommunications Conference - GLOBECOM 2011.

[4]  John Wiley,et al.  Pricing Communication Networks : Economics, Technology and Modeling , 2014 .

[5]  Leonardo Badia,et al.  Demand and pricing effects on the radio resource allocation of multimedia communication systems , 2003, GLOBECOM '03. IEEE Global Telecommunications Conference (IEEE Cat. No.03CH37489).

[6]  Costas Courcoubetis,et al.  Pricing Communication Networks , 2003 .

[7]  Dusit Niyato,et al.  Distributed resource allocation in wireless networks under uncertainty and application of Bayesian game , 2011, IEEE Communications Magazine.

[8]  Abraham O. Fapojuwo,et al.  Analysis of Common Radio Resource Management Scheme for End-to-End QoS Support in Multiservice Heterogeneous Wireless Networks , 2008, IEEE Transactions on Vehicular Technology.

[9]  Kwang Mong Sim,et al.  Analyzing the impact of selfish behaviors of Internet users and operators , 2003, IEEE Communications Letters.

[10]  J. Goodman.  Note on Existence and Uniqueness of Equilibrium Points for Concave N-Person Games , 1965 .

[11]  Ranjan K. Mallik,et al.  Duopoly price competition of WLAN service providers in presence of heterogeneous user demand , 2012, 2012 IEEE Wireless Communications and Networking Conference (WCNC).