Bi-Objective Competition Pricing Model for Component Web Service Economy

In the web service marketplace, component-based economy has been proposed for describing participants' behavioral patterns. Composite service networks combine multiple composite services required by various service consumers. With each composite service as a product, web services comprise heterogeneous products. In this study, the pricing behavior of networked individual service providers is investigated. With the objective of service survival or high profitability, service providers compete both on the single-service and service-network levels. Using examples, several mild assumptions are formulated and analyzed. Then, a bi-objective optimization model is proposed based on these assumptions, which attempts to maintain a reasonable effectiveness-fairness trade-off from the individual service providers' perspective. The NP-completeness of the single-objective version is demonstrated by transforming the problem into a subset sum problem, which highlights the challenge of obtaining a pareto set for the bi-objective model. Finally, to validate the proposed model, numerical experimentation and case study are conducted, and both the bi-objective and many-objective versions of the problem are discussed.