article

Price war in heterogeneous wireless networks

Authors:

Patrick Maillé,

Bruno TuffinAuthors Info & Claims

Computer Networks: The International Journal of Computer and Telecommunications Networking, Volume 54, Issue 13

Pages 2281 - 2292

https://doi.org/10.1016/j.comnet.2010.03.015

Published: 01 September 2010 Publication History

Abstract

Wireless users have the opportunity to choose between heterogeneous access modes, such as 3G, WiFi or WiMAX for instance, which operate with different distance ranges. Due to the increasing commercial interest in access networks, those technologies are often managed by competing providers. The goal of this paper is to study the price war occurring in the case of two providers, with one provider operating in a sub-area of the other. A typical example is that of a WiFi operator against a WiMAX one, WiFi being operated in the smaller area. Using a simple model, we discuss how, for fixed prices, (elastic) demand is split among providers, and then characterize the Nash equilibria for the price war. We derive the conditions on provider capacities and coverage areas under which providers share demand on the common area. A striking additional result is that among the Nash equilibria, the one for which providers set the largest price corresponds to the case when the competitive environment does not bring any loss in terms of social welfare with respect to the socially optimal situation: at equilibrium, the overall utility of the system is maximized. The price of stability is one.

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Cited By

Muthuswamy MBerry RHonig MNguyen TSubramanian VVohra R(2021)Spectrum Pooling with Competitive Service Providers2021 IEEE International Symposium on Dynamic Spectrum Access Networks (DySPAN)10.1109/DySPAN53946.2021.9677426(169-176)Online publication date: 13-Dec-2021
https://dl.acm.org/doi/10.1109/DySPAN53946.2021.9677426
Gazda JBugr GVoloin MDrotr PHorvth DGazda V(2017)Dynamic spectrum leasing and retail pricing using an experimental economyComputer Networks: The International Journal of Computer and Telecommunications Networking10.1016/j.comnet.2017.04.040121:C(173-184)Online publication date: 5-Jul-2017
https://dl.acm.org/doi/10.1016/j.comnet.2017.04.040
Nguyen TZhou HBerry RHonig MVohra R(2016)The Cost of Free SpectrumOperations Research10.1287/opre.2016.152564:6(1217-1229)Online publication date: 1-Dec-2016
https://dl.acm.org/doi/10.1287/opre.2016.1525
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cover image Computer Networks: The International Journal of Computer and Telecommunications Networking

Computer Networks: The International Journal of Computer and Telecommunications Networking Volume 54, Issue 13

September, 2010

228 pages

ISSN:1389-1286

Issue’s Table of Contents

Copyright © Elsevier B.V. © 2010.

Publisher

Elsevier North-Holland, Inc.

United States

Publication History

Published: 01 September 2010

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Cited By

Muthuswamy MBerry RHonig MNguyen TSubramanian VVohra R(2021)Spectrum Pooling with Competitive Service Providers2021 IEEE International Symposium on Dynamic Spectrum Access Networks (DySPAN)10.1109/DySPAN53946.2021.9677426(169-176)Online publication date: 13-Dec-2021
https://dl.acm.org/doi/10.1109/DySPAN53946.2021.9677426
Gazda JBugr GVoloin MDrotr PHorvth DGazda V(2017)Dynamic spectrum leasing and retail pricing using an experimental economyComputer Networks: The International Journal of Computer and Telecommunications Networking10.1016/j.comnet.2017.04.040121:C(173-184)Online publication date: 5-Jul-2017
https://dl.acm.org/doi/10.1016/j.comnet.2017.04.040
Nguyen TZhou HBerry RHonig MVohra R(2016)The Cost of Free SpectrumOperations Research10.1287/opre.2016.152564:6(1217-1229)Online publication date: 1-Dec-2016
https://dl.acm.org/doi/10.1287/opre.2016.1525
Kavurmacioglu EAlanyali MStarobinski D(2016)Competition in private commonsIEEE/ACM Transactions on Networking10.1109/TNET.2014.235767924:1(29-42)Online publication date: 1-Feb-2016
https://dl.acm.org/doi/10.1109/TNET.2014.2357679
Kavurmacioglu EAlanyali MStarobinski D(2014)Demand-Invariant Price Relationships and Market Outcomes in Competitive Private CommonsACM Transactions on Internet Technology10.1145/266349514:2-3(1-30)Online publication date: 28-Oct-2014
https://dl.acm.org/doi/10.1145/2663495
Maillé PReichl PTuffin B(2012)Competition among telecommunication providersTelecommunication Economics10.5555/2340759.2340787(179-187)Online publication date: 1-Jan-2012
https://dl.acm.org/doi/10.5555/2340759.2340787

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