Time-Dependent Pricing for Bandwidth Slicing Under Information Asymmetry and Price Discrimination

Abstract

Due to the bursty nature of Internet traffic, network service providers (NSPs) are forced to expand their network capacity in order to meet the ever-increasing peak-time traffic demand, which is however costly and inefficient. How to shift the traffic demand from peak time to off-peak time is a challenging task for NSPs. In this paper, we study the implementation of time-dependent pricing (TDP) for bandwidth slicing in software-defined cellular networks under information asymmetry and price discrimination. Congestion prices indicating real-time congestion levels of different links are used as a signal to motivate delay-tolerant users to defer their traffic demands. We formulate the joint pricing and bandwidth demand optimization problem as a two-stage Stackelberg leader-follower game. Then, we investigate how to derive the optimal solutions under the scenarios of both complete and incomplete information. We also extend the results from the simplified case of a single congested link to the more complicated case of multiple congested links, where price discrimination is employed to dynamically adjust the price of each congested link in accordance with its real-time congestion level. Simulation results demonstrate that the proposed pricing scheme achieves superior performance in increasing the NSP’s revenue and reducing the peak-to-average traffic ratio (PATR).