Pricing games of NFV infrastructure providers

Laszlo Toka (), Marton Zubor, Attila Korosi, George Darzanos, Ori Rottenstreich and Balazs Sonkoly
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Laszlo Toka: Budapest University of Technology and Economics
Marton Zubor: Budapest University of Technology and Economics
Attila Korosi: Budapest University of Technology and Economics
George Darzanos: Athens University of Economics and Business
Ori Rottenstreich: Technion
Balazs Sonkoly: Budapest University of Technology and Economics

Telecommunication Systems: Modelling, Analysis, Design and Management, 2021, vol. 76, issue 2, No 5, 219-232

Abstract: Abstract Future online services will be provisioned over the federation of infrastructure providers for economic reasons: for effective usage of resources and for a wide geographic reach of customers. The technical enablers of this setup, envisioned also for 5G services, are the virtualization techniques applied in data centers, and in access and core networks. Business aspects around the provisioning of these services however pose still unresolved questions. In this heterogeneous setup those who want to deploy an online service face the problem of selecting the compute and network resource set that fulfills the technical requirements of the service deployment and that is preferable also from an economic point of view. Infrastructure providers compete among themselves for these customers, and shape their business offerings with profit maximization in mind. We model this resource market with the tool set of graph and game theory in order to study its characteristics. We show that customers need to tackle a hard problem if they want to meet both their technical and business needs, let alone minimizing costs. Furthermore, we derive the best pricing strategies that the providers should follow given their expectation about customers’ demand. Interestingly, we show that equilibrium prices and the attainable income strongly depend on the provider’s location within the network.

Date: 2021
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DOI: 10.1007/s11235-020-00706-5

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