Diff-Price: Differential Pricing Scheme for Provisioning Safety-as-a-Service in Vehicular IoT Applications

Abstract

In this paper, we propose a differential pricing scheme, named as <italic xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">Diff-Price</i> , to deliver customized safety services to the users at an optimal price and maximizing the profit of Safety Service Provider (SSP) using the Safety-as-a-Service (Safe-aaS) platform. None of the existing pricing schemes addresses the dynamic variation of price as the type of users and decision parameters requested by them vary. We assume road transportation as the implementation scenario of Safe-aaS. In order to deal with these issues, we formulate a pricing scheme, which renders different prices for the same decision parameters. The amount charged from the users are based on their type, decision parameters selected by them, and the duration for which they request the service. Additionally, the SSP allows suitable discounted price to the users, which is determined from their mode of payment and history of services availed. Further, to model the interaction between the users and SSPs, we design our problem as a multiple leader multiple follower non-cooperative Stackelberg game. We calculate the utility of SSPs and formulate an optimization problem to compute the optimal value of the basic price charged from the users. The exhaustive mathematical analysis and simulation results reveal that the proposed pricing scheme, Diff-Price improves the financial gain of the service providers as the number of users increases by 13.51%, 15.75%, and 14.173% respectively, compared to the adaptive incremental spot pricing scheme [1], differentiated cloud virtual-network as-a-service scheme [2], and smart road pricing system [3].