Dynamic Pricing for Revenue Maximization in Mobile Social Data Market With Network Effects

Abstract

Mobile data demand is increasing tremendously in wireless social networks, and thus an efficient pricing scheme for social-enabled services is urgently needed. Though static pricing is dominant in the actual data market, price intuitively ought to be dynamically changed to yield greater revenue. The critical question is how to design the optimal dynamic pricing scheme, with prospects for maximizing the expected long-term revenue. In this paper, we study the sequential dynamic pricing scheme of a monopoly mobile network operator in the social data market. In the market, the operator, i.e., the seller, individually offers each mobile user, i.e., the buyer, a certain price in multiple time periods sequentially and repeatedly. The proposed scheme exploits the network effects in the mobile users' behaviors that boost the social data demand. Furthermore, due to limited radio resource, the impact of wireless network congestion is taken into account in the pricing scheme. Thereafter, we propose a modified sequential pricing policy in order to ensure social fairness among mobile users in terms of their individual utilities. To gain more insights, we further study a simultaneous dynamic pricing scheme in which the operator offers the data price simultaneously. We analytically demonstrate that the proposed dynamic pricing scheme can help the operator gain greater revenue and users achieve higher total utilities than those of the baseline static pricing scheme. We construct the social graph using Erdös-Rényi (ER) model and the real dataset based social network for performance evaluation. The numerical results corroborate that the dynamics of pricing schemes over static ones can significantly improve the revenue of the operator.