Abstract
Mobile data offloading is an emerging technology to alleviate cellular network congestion and improve user service quality. In this work, we investigate the economics of mobile data offloading through access points (APs) deployed by small cell service providers (SSPs), implementing uniform volume prices for all the mobile users (MUs) in each SSP’s coverage including the overlapping area. In particular, we consider a data offloading game with a single mobile network operator (MNO) and two SSPs with overlapping coverage areas, where each SSP announces a uniform price for serving the cellular traffic within its coverage, and the MNO determines the traffic volumes to offload. We show that there is no pure Nash equilibrium (PNE) under such price competition, and determine the corresponding mixed strategy Nash equilibrium (MNE) using price randomization. As a practical solution, we propose a simple one shot auction mechanism that is easy to implement and has PNEs which is payoff equivalent with the MNE under price competition. We believe that this simple mechanism due to its simplicity of determining the equilibrium prices could be used in the negotiation between the SSPs and the MNO to determine the average service prices. Furthermore, we investigate the pricing problem when there is only partial flow information available for the SSPs, including the symmetric partial information model and the asymmetric partial information model. We compute the mixed strategy Nash equilibrium in the offloading game when the SSPs compete freely or use the proposed one-shot auction mechanism, and compare the SSPs and MNO’s payoffs of the pricing schemes with partial information and full information. Also we take in consideration of the MNO’s decisions about whether to reveal the information to the SSPs, and it can be observed that when there is only MNE in the auction game, the MNO will prefer to reveal information to obtain a better payoff, and the competition in the offloading market will converge to a state where the SSPs always compete with pure strategies and achieve an efficient pure Nash equilibrium. Finally, we study the strategic topological infrastructure placement problem using a 1-dimension (1D, linear) user traffic flow model and a 2-dimension (2D) user traffic flow model when SSPs compete assuming uniform price competition as above. We show that the first mover in the placement problem will deploy its APs to cover more than half of the total flow volume and has an advantage to obtain a higher equilibrium payoff.