Optimising Wimax Business Models using Incentive Engineering

Economic analysis of WiMAX business models under the German legal framework shows that high overbooking rates are essential for establishing profitable business models. In this paper, we analyse different incentive systems that affect users to reduce bandwidth consumption in congestion periods in order to permit an increase of the overbooking rate. At first we examine incentive systems on monetary level in form of tariff models. We show that tariff models which induce desired incentives have a low user acceptance. Therefore, we propose a non-monetary incentive system which induces incentives to solely consume bandwidth if users´ marginal utility exceeds social marginal costs. Furthermore we show that this incentive system leads to self differentiation of users in different tariff classes. Thus, a significant increase of welfare is achieved. Keeping welfare at a constant level, this enables a raising of the overbooking rate which abbreviates amortisation time