Economic Models for Tiered Network Services

Dynamic Programming;Market Segmentation;Service Bundling;Internet Tiered Service

Lv, Qian ; Wenye Wang, Committee Member,Rudra Dutta, Committee Member,Khaled Harfoush, Committee Member,George N Rouskas, Committee Chair,Lv, Qian ; Wenye Wang ; Committee Member ; Rudra Dutta ; Committee Member ; Khaled Harfoush ; Committee Member ; George N Rouskas ; Committee Chair

University:North Carolina State University

关键词: Dynamic Programming;    Market Segmentation;    Service Bundling;    Internet Tiered Service;   

Others  :  https://repository.lib.ncsu.edu/bitstream/handle/1840.16/6176/etd.pdf?sequence=1&isAllowed=y

美国|英语

来源: null

【 摘 要 】

Tiered network services have been prevalent in current networking industry. Theterm tiered service means that the network operator only provides a small set of tiers(levels) - which offer progressively higher levels of service - to the customers each of whomwill be mapped to one of the given tiers. In this thesis we focus on the economic issuesfor tiered network service. We first formulate the problem of selecting service tiers fromthree perspectives: one that considers the users interests only, one that considers only theservice provider’s interests, and one that considers both simultaneously. We consider thesolution to this problem under two cases: 1) the discrete case, i.e., each user demand isknown to the service provider; 2) the stochastic case, i.e., the service provider only knowsthe probability distribution of the user demands. For both cases, we present accurate andefficient algorithms based on dynamic programming. After finding the set of (near-) optimalservice tiers, we then employ game-theoretic techniques to find an optimal price for eachservice tier that strikes a balance between the conflicting objectives of users and serviceprovider. This work provides a theoretical framework for reasoning about and pricingInternet tiered services, as well as a practical toolset for network providers to developcustomized menus of service offerings.We further consider some advanced economic topics in tiered network service. Wenotice that some network services may tend to be elastic, i.e., the users may value a givenservice differently and show different willingness to pay for the service. In this thesis, we assume that users are partitioned into some distinct classes. We develop an optimalalgorithm to select jointly the set of service tiers and their prices so as to maximize theprovider profits. Our research shows that introducing multiple tiers can be an effectivemarket segmentation strategy that may lead to an increase in profits.Another advanced topic in tiered network service is service bundling, which meansthe network providers combine several services together and sell them as a single package at alower price than that if the services are sold separately. Based on tools from microeconomicsand utility theory, we developed an efficient method to find tiered structures for bundles ofnetwork services with the objective of maximizing provider profits under user constraints.