International Conference Paris Metro Pricing for Internet Service Differentiation

2015.07.31 14:33

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author Dongmyung Lee 
2nd author Taehyun Kim
Jeonghoon Mo
Jinwoo Park 
presenter  
info This conference paper has been presented by Dongmyung Lee on the International ICST Conference on Game Theory for Networks. The conference has been held in Shanghai, China, 2011/4/16 ~ 2011/4/18 . 
year 2011 
category IC 
start / end date  
city / nation  
학회 GameNets 
keywords Internet services, price discrimination, Paris Metro Pricing, revenue maximization, user subscription, Nash equilibrium 
abstract This paper analyzes the Paris Metro Pricing (PMP) strat-
egy for differentiating Internet service. PMP has several advantages over
other pricing schemes that guarantee quality of service (QoS) such as
simplicity and less bandwidth overhead. In this paper, we develop a sim-
ple analytical model for PMP. We first assume that there is only one
network service provider (a monopolist) serving N users and model the
user behavior and the provider's profit. Then we derive the optimal ra-
tio of dividing a given network capacity in order to maximize the profit
of the service provider. Our results show that, by maximizing providers
profit, the subscription is also maximized which can be interpreted as a
higher satisfaction of users compared to that of not using PMP. In ad-
dition, by taking into account various network types, we show that in a
monopoly environment, it is always better to implement PMP regardless
of user populations we considered. We then further extend our model to
a duopoly setting. We found that there exist no Nash equilibrium even
when both providers do not dierentiate the network service. 

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