Dynamic internet pricing and bandwidth guarantees with nash equilibrium

Abstract

The decrease in price of internet access has brought clients' focus on a good internet service. Clients now demand guarantees for the bandwidth promised. We present a scheme in which clients are assured connection and bandwidth and if assured service is not provided, service providers pay penalty to them. The use of multi-SIM handheld devices such as mobiles and tablets have enabled clients to make a “choice” between multiple service providers for communication services. With competition, a client will prefer to connect to that provider who is providing the lowest price with guarantees. In this paper, we present a scenario of dynamic pricing and guarantees with penalties and providers have to decide on pricing strategies which will maximize their income. We present a solution among two service providers which achieves a Nash equilibrium with the maximizing of the expected income being the decision criterion.