Abstract
In this paper, we study how an oligopolist influences the coalition structure in federated cloud markets. Specifically, we use cooperative game theory to model the circumstances under which a cloud provider prefers to join a cloud federation vis-a-vis consider taking a price offer made by an oligopolist. We consider two price offering strategies for an oligopolist: non-adaptive and adaptive. In non-adaptive strategy, an oligopolist makes a price offer to all the cloud providers simultaneously. It can be noted that the oligopolist can buy-out all the cloud providers by making a price offer which is equal to a core allocation and the total price offer made by the oligopolist is equal to the value of the grand coalition. In adaptive strategy, the oligopolist approaches the cloud providers one after another in a sequential manner. We show that by using the adaptive strategy, the oligopolist can buy-out all the cloud providers at a total price offer which is less than that of the non-adaptive strategy.
Highlights
The current cloud computing market structure is akin to oligopoly as few mega cloud providers completely own the market share
In Background section, we provide the necessary background on cooperative game theory and linear production games; in Federation formation and payoff distribution using linear production games section, we formulate the cloud federation formation and payoff distribution problems using linear production games; in Intervention of an oligopolist in federation formation section, we show the impact of an oligopolist on federation formation and how we can arrive at stable coalition structures; related experimental analysis is provided in Experimental analysis section; in Oligopolist price determination section, we present non-adaptive and adaptive price offering strategies of an oligopolist; Related work section contains the related work; and we conclude with Conclusions section
We can intuitively infer that the optimal virtual machine production plan (x∗1, · · ·, x∗m) obtained from solving the OPTLP(S) problem can be almost realized while respecting the practical physical constraints
Summary
The current cloud computing market structure is akin to oligopoly as few mega cloud providers completely own the market share. The broker is one of the very few oligopolists who owns a substantial market share He can generate more revenue and thereby profit, using the same set of resources when compared with micro cloud providers. In Background section, we provide the necessary background on cooperative game theory and linear production games; in Federation formation and payoff distribution using linear production games section, we formulate the cloud federation formation and payoff distribution problems using linear production games; in Intervention of an oligopolist in federation formation section, we show the impact of an oligopolist on federation formation and how we can arrive at stable coalition structures; related experimental analysis is provided in Experimental analysis section; in Oligopolist price determination section, we present non-adaptive and adaptive price offering strategies of an oligopolist; Related work section contains the related work; and we conclude with Conclusions section
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