User preference aware multimedia pricing model using game theory and prospect theory for wireless communications

Providing user satisfaction is a major concern for on-demand multimedia service providers and Internet carriers in Wireless Communications. Traditionally, user satisfaction was measured objectively in terms of throughput and latency. Nowadays the user satisfaction is measured using subjective metrices such as Quality of Experience (QoE). Recently, Smart Media Pricing (SMP) was conceptualized to price the QoE rather than the binary data traffic in multimedia services. In this research, we have leveraged the SMP concept to chalk up a QoE-sensitive multimedia pricing framework to allot price, based on the user preference and multimedia quality achieved by the customer. We begin by defining the utility equations for the provider-carrier and the customer. Then we translate the profit maximizing interplay between the parties into a two-stage Stackelberg game. We model the user personal preference using Prelec weighting function which follows the postulates Prospect Theory (PT). An algorithm has been developed to implement the proposed pricing scheme and determine the Nash Equilibrium. Finally, the proposed smart pricing scheme was tested against the traditional pricing method and simulation results indicate a significant boost in the utility achieved by the mobile customers.