A simple game-theoretic analysis of peering and transit contracting among Internet service providers

Narine Badasyan and Subhadip Chakrabarti

Telecommunications Policy, 2008, vol. 32, issue 1, 4-18

Abstract: The paper presents a simple game-theoretic model of two Internet service providers (ISPs), drawn from a larger set consisting of Tiers-1 and -2 ISPs, who choose between peering and transit agreements. The study focuses on the costs of interconnection taking into account traffic imbalances. The analysis suggests that if the traffic flows and the costs of interconnection are fairly shared, the provider's peer, otherwise they choose transit. Moreover, the joint profits are maximized under the transit arrangement.

Keywords: Peering; Transit; Bilateral; Nash; Equilibrium (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (7)

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