When Virtual Network Operator Meets E-Commerce Platform: Advertising via Data Reward

Abstract

In China, some e-commerce platform (EP) companies such as Alibaba and JD are now allowed to partner with network operators (NOs) to act as virtual network operators (VNOs) to provide mobile data services for mobile users (MUs). However, it is a question worth researching on how to generate more profits for all network players, with EP companies being VNOs, through appropriate integration of the VNO business and the companies' own e-commerce business. To address this issue, in this work we propose a novel incentive mechanism for advertising via mobile data reward, and model it as a three-stage static Stackelberg game. We obtain the closed-form optimal solution of the Nash equilibrium by backward induction. Besides, for the scenario lack of knowledge on the interaction between the NO and VNO in a dynamic game, we propose a deep Q-network (DQN) based algorithm to derive the optimal strategies of the NO and VNO. Simulation results show impact of system parameters on the utilities of game players and social welfare. We also study the impact of system parameters on different algorithms and discover that the proposed DQN-based algorithm can learn a good strategy as compared with the Stackelberg equilibrium solution.