A Non-cooperative Game-Theoretic Framework for Sponsoring Content in the Internet Market

Abstract

Data traffic demand over the Internet is increasing rapidly, and it is changing the pricing model between internet service providers (ISPs), content providers (CPs) and end users. One recent pricing proposal is sponsored data plan, i.e., when CP negotiates with the ISP on behalf of the users to remove the network subscription fees so as to attract more users and increase the number of advertisements. As such, a key challenge is how to provide proper sponsorship in the situation of complex interactions among the telecommunication actors, namely, the advertisers, the content provider, and users. To answer those questions, we explore the potential economic impacts of this new pricing model by modeling the interplay among the advertiser, users, and the CPs in a game theoretic framework. The CP may have either a subscription revenue model (charging end-users) or an advertisement revenue model (charging advertisers). In this work, we design and analyze the interaction among CPs having an advertisement revenue as a non-cooperative game, where each CP determines the proportion of data to sponsor and a level of credibility of content. In turn, the end-users demand for the content of a CP depends not only on their strategies but also upon those proposed by all of its competitors. Through rigorous mathematical analysis, we prove the existence and uniqueness of the Nash equilibrium. Based on the analysis of the game properties, we propose an iterative algorithm, which guarantees to converge to the Nash equilibrium point in a distributed manner. Numerical investigation shows the convergence of a proposed algorithm to the Nash equilibrium point and corroborates the fact that sponsoring content may improve the CPs outcome.