A Novel Two-Stage Game Model for Pricing Cloud/ Fog Computing Resource in Blockchain Systems

Jinmian Chen (), Yukun Cheng and Zhiqi Xu ()
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Jinmian Chen: School of Business, Suzhou University of Science and Technology, Suzhou 215009, P. R. China
Yukun Cheng: School of Business, Suzhou University of Science and Technology, Suzhou 215009, P. R. China
Zhiqi Xu: School of Business, Suzhou University of Science and Technology, Suzhou 215009, P. R. China

Asia-Pacific Journal of Operational Research (APJOR), 2023, vol. 40, issue 01, 1-22

Abstract: Cloud/ fog computing resource pricing is a new paradigm in the blockchain mining scheme, as the participants would like to purchase the cloud/ fog computing resource to speed up their mining processes. In this paper, we propose a novel two-stage game to study the optimal price-based cloud/ fog computing resource management, in which the cloud/fog computing resource provider (CFP) is the leader, setting the resource price in Stage I, and the mining pools act as the followers to decide their demands of the resource in Stage II. Since mining pools are bounded rational in practice, we model the dynamic interactions among them by an evolutionary game in Stage II, in which each pool pursues its evolutionary stable demand based on the observed price, through continuous learning and adjustments. Backward induction method is applied to analyze the sub-game equilibrium in each stage. Specifically in Stage II, we first build a general study framework for the evolutionary game model, and then provide a detailed theoretical analysis for a two-pool case to characterize the conditions for the existence of different evolutionary stable solutions. Referring to the real world, we conduct a series of numerical experiments, whose results validate our theoretical findings for the case of two mining pools. Additionally, the impacts from the size of mining block, the unit transaction fee and the price of token on the decision makings of participants are also discussed.

Keywords: Cloud/fog computing; blockchain; evolutionary game; pricing and allocation; resource management (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1142/S0217595922400012

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