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Demand-Invariant Price Relationships and Market Outcomes in Competitive Private Commons

Published: 28 October 2014 Publication History

Abstract

We introduce a private commons model that consists of network providers who serve a fixed primary demand and strategically price to improve their revenues from an additional secondary demand. For general forms of secondary demand, we establish the existence and uniqueness of two characteristic prices: the break-even price and the market sharing price. We show that the market sharing price is always greater than the break-even price, leading to a price interval in which a provider is both profitable and willing to share the demand. Making use of this result, we give insight into the nature of market outcomes.

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  1. Demand-Invariant Price Relationships and Market Outcomes in Competitive Private Commons

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      cover image ACM Transactions on Internet Technology
      ACM Transactions on Internet Technology  Volume 14, Issue 2-3
      Special Issue on Pricing and Incentives in Networks and Systems and Regular Papers
      October 2014
      287 pages
      ISSN:1533-5399
      EISSN:1557-6051
      DOI:10.1145/2684804
      Issue’s Table of Contents
      Permission to make digital or hard copies of all or part of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. Copyrights for components of this work owned by others than ACM must be honored. Abstracting with credit is permitted. To copy otherwise, or republish, to post on servers or to redistribute to lists, requires prior specific permission and/or a fee. Request permissions from [email protected]

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      Publication History

      Published: 28 October 2014
      Accepted: 01 June 2014
      Revised: 01 March 2014
      Received: 01 September 2013
      Published in TOIT Volume 14, Issue 2-3

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      Author Tags

      1. Dynamic spectrum sharing
      2. competitive market analysis
      3. game theory
      4. pricing and profitability

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