A game theoretic analysis of service competition and pricing in heterogeneous wireless access networks

Next generation wireless systems will provide highspeed wireless connectivity and seamless mobility through the provisioning of heterogeneous wireless access. In such a heterogeneous wireless access environment, mobile users will be able to connect to multiple wireless networks (e.g., IEEE 802.16, cellular, and IEEE 802.11-based networks) operated by different service providers, simultaneously. We address the problem of competitive pricing in such a heterogeneous wireless access network. Each of the wireless access networks is assumed to support two types of connections, namely, premium and best-effort connections. For the premium connections, the price is fixed, while for the best effort connections it is dynamic and depends on the competitive or cooperative behavior of the service providers. A competitive pricing model for best-effort connections is developed based on a noncooperative game formulation. We first consider the case where the prices are offered to the users at the same time (i.e., a simultaneous-play game). Nash equilibrium is considered as the solution of this game. Afterwards, we consider the case where a service provider can offer its price before other providers. This is referred to as a leader-follower game for which Stackelberg equilibrium is considered as the solution. We also consider a cooperative pricing model which maximizes the total revenue of the service providers. A method for revenue sharing is presented for this cooperative pricing model. Numerical studies are carried out to evaluate the performances of the different pricing models.