On multi-resource procurement in internet access markets: Optimal strategies and market equilibrium

Abstract

With the increasing popularity and significance of content delivery services, especially video streaming, stringent Quality of Service (QoS) requirements have been placed upon Internet content providers (CPs). As a result, CPs have strong incentives to pay for resources such as premium peering bandwidth and cache capacity that ameliorate service quality. In this paper, we study an Internet access market with multiple access resources that CPs can purchase to enhance service quality. We build a detailed content delivery model, through which we characterize the traffic throughput and the resulting utilities of CPs and social welfare. We show that a market equilibrium exists for a multi-resource market, at which the optimization problems for individual utilities and social welfare coincide. Furthermore, we characterize the optimal purchasing strategies of CPs as well as how varying parameters are going to change the market equilibrium via sensitivity analysis.