Smart Data PricingSmart Data Pricing

Seong-Lyun Kim

slkim@yonsei ac krslkim@yonsei.ac.krhttp://web.yonsei.ac.kr/slkim

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Contents• Data Pricing• Price Competition• Subsidyy• Spectrum Pricing (Auction)• Q&A• Q&A

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Data Pricing

“Revenue for the system and use yresources more efficiently”

J Walrand Economic Models of Communication Networks NewJ. Walrand, Economic Models of Communication Networks. NewYork: Springer, Ch. 3, pp. 57-87, 2008.

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Tragedy of Commonsg y• Each herdsman (user) imposes a total

t lit (i t f ) th th th texternality (interference) on the others that exceeds his own benefit increment.

G. Hardin, “The Tragedy of the Commons,” Science, 162: 1243-1248, 1968.

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Classification

S. Sen, C. Joe-Wong, S. Ha, and M. Chiang. Smart data pricing (sdp): Economic solutions to network congestion. SIGCOMM eBook on Recent Advances in Networking, 2013.

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Time-ahead Pricingg

S. Ha, S. Sen, C. Joe-Wong, Y. Im, and M. Chiang, "TUBE: Time Dependent Pricing for Mobile Data", Proc. of ACM SIGCOMM 2012

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DataWiz

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다른모습그러나비슷한속성

• 공통점• “Air”• 규모의경제 (Density of customers)에의존• 이윤추구하는동시에공공 서비스 (예 철도 전기 )• 이윤추구하는동시에공공 서비스 (예, 철도, 전기…)• 규제기관의강력한 통제

• 가격• 서비스• 시장진입

Y. J. Hwang, K. W. Sung, S.-L. Kim and J. Zander, “Scenario Making for Assessment of Secondary Spectrum Access,” IEEE Wireless Communications, Vol. 19 (4), pp. 25-31, August 2012.

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Economic Models of CommunicationEconomic Models of Communication Networks

J. Walrand, Economic Models of Communication Networks. NewJ. Walrand, Economic Models of Communication Networks. NewYork: Springer, Ch. 3, pp. 57-87, 2008.

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Revenue-max Pricingg• Price ≤ User type ≤ QoS

0 1

User type

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Paris Metro Pricing (1/3)g ( )• Utility Depends on Utilization

– How much the service price should be?

A. ODLYZKO, “Paris Metro Pricing for the Internet,” ACM Conference on Electronic Commerce,1998.

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Paris Metro Pricing (2/3)g ( )• Service differentiation to increase the revenue

substantiallysubstantially.

Inexpensive High Utilization Low QoS (tourist class)

• A more expensive network has a lower utilization and

Expensive Small Utilization High QoS (business class)

• A more expensive network has a lower utilization and, accordingly, lower delays and more throughput for each of its connections

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of its connections

Paris Metro Pricing (3/3)g ( )• Service differentiation with Paris metro pricing

i th f 1/6 t 9/40 bincreasesvthe revenue from 1/6 to 9/40, or by 35%.

0 1

Tourist class Business class

J. Walrand, Economic Models of Communication Networks. NewJ. Walrand, Economic Models of Communication Networks. NewYork: Springer, Ch. 3, pp. 57-87, 2008.

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Price Competition

S. M. Yu and S.-L. Kim, "Game-theoretic Understanding of Price Dynamics in Mobile Communication Services," to appear in IEEE Transactions on Wireless Communications, http://arxiv.org/abs/1304.3875

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Economic Layery• Users and providers respond to economic

i ti d ff t th t kincentives and affect the network

NSPRegulation

NSPsRegulator

CournotCompetition (C it )

BertrandCompetition

(P i )

Demand

(Capacity) (Price)

Networks UsersQoS

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User Type, Price and QoSyp ,

• Price ≤ User type ≤ QoSPrice User type QoS

0 1

<Perfectly segmented market>

min1 1p max

1 1q max2 2q min

2 2p

<Non-segmented market>

0 1

<Non segmented market>

min max1 2 2q min

2 2p max1 1q 1p

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Two Users Non-cooperative Game:NSP’s Optimal StrategyNSP s Optimal Strategy

• Best response function

* 22 1

11 2 1If 0 3 3 2

pp p

*2 1 2

3 3 21 2 1If

3 2p p p

*2 1

1 1If 2 2

p p

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NSP’s Optimal Strategyp gy• Best Response Function

2pBR1 1BR

2BR

1/ 2

2 / 3

1 / 3long jump

i

1p1/ 2 12 / 31 / 3

price war

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Price War with Long Jumpg p

1pp

0 12 / 31/ 3 1/ 2

2p

0 12 / 31/ 3 1/ 2

J. Walrand, Economic Models of Communication Networks. NewYork: Springer, Ch. 3, pp. 57-87, 2008.

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Regulation for Convergenceg g

• A regulation that limits the number of price level changes k th i l l t ilib i i tmakes the price levels converge to an equilibrium point

that is Pareto-optimal.

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Subsidy

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Two Subsidy Schemesy

• Price Subsidy– Giving price discount to users accessing network

service.

• Data (QoS) Subsidy– Providing a predefined amount of data (QoS) to usersProviding a predefined amount of data (QoS) to users

without any charge.

S M Yu and S L Kim "Guaranteeing User Welfare in Network Service:S. M. Yu and S.-L. Kim, "Guaranteeing User Welfare in Network Service: Comparison of Two Subsidy Schemes," Proc. ACM SIGMETRICS/Performance Workshop W-PIN (First Workshop on Pricing and Incentives in Networks), London, UK, 2012.

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Price Subsidyy

S. M. Yu and S.-L. Kim, "Game-theoretic Understanding of Price Dynamics in Mobile Communication Services," to appear in IEEE Transactions on Wireless Communications, http://arxiv.org/abs/1304.3875

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Data (QoS) Subsidy Scheme( ) y

• Data (QoS) Subsidy Scheme (Type 1)– The regulator gives all of the available spectrum

amount to mobile network operators (MNO) for free in return for providing a predefined amount of data (QoS) to users without any charge(QoS) to users without any charge.

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Partial Spectrum Leasingp g

For businessFor free

• Data (QoS) Subsidy Scheme (Type 2)Dynamic control of the amount of leasing bandwidth ➡ “free services” to all– Dynamic control of the amount of leasing bandwidth ➡ free services to all users in a leftover bandwidth.

– MNO: Joint leasing and pricing decisions.Regulator: “Optimal spectrum price” for maximal profit and user welfare– Regulator: Optimal spectrum price for maximal profit and user welfare.

S. Y. Jung, S. M. Yu, and S.-L. Kim, "Utility-optimal Partial Spectrum Leasing for Future Wireless Networks,“ in Proc. IEEE Vehicular Technology Conference, Spring, Dresden, Germany, 2013 (Best paper award).

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User Welfare and Profit Gain

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Spectrum Pricing (Auction)

S. Y. Jung, S. M. Yu, and S.-L. Kim, "Asymmetric-valued Spectrum Auction and Competition in Broadband Wireless Services,” in Proc. WIOPT 2014. http://arxiv.org/pdf/1307.7838v1.pdf

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LTE Spectrum Auction (2013.8)p ( )• Auction (ongoing this week)

• Carrier Aggregation vs. Wideband LTE (20 MHz Bandwidth, Rel 11)Ca e gg ega o s de a d ( 0 a d d , e )

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Asymmetric–valued Spectrum Auctiony p

• Two MNOs compete in a first-price sealed-bid auction where two spectrum blocks A and B are auctioned off towhere two spectrum blocks A and B are auctioned off to them

• A and B are the same amount of spectrum (i e 10 MHzA and B are the same amount of spectrum (i.e., 10 MHz spectrum block).

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Spiteful Behaviorp

아사다마오 김연아

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Multi-stage Gamesg

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Results• MNOs announce different equilibrium prices to

h idi th litusers, even when providing the same quality services.

• The market share leader, despite charging a higher price, may still dominate the game.

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항공서비스산업은지금?

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Q&A

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