Bertrand Competition in Networks
SAGT '08 Proceedings of the 1st International Symposium on Algorithmic Game Theory
The price of anarchy in bertrand games
Proceedings of the 10th ACM conference on Electronic commerce
Pricing, competition, and routing in relay networks
Allerton'09 Proceedings of the 47th annual Allerton conference on Communication, control, and computing
Pricing with markups under horizontal and vertical competition
Proceedings of the Behavioral and Quantitative Game Theory: Conference on Future Directions
A game-theoretic analysis of inter-session network coding
ICC'09 Proceedings of the 2009 IEEE international conference on Communications
Near-optimal power control in wireless networks: a potential game approach
INFOCOM'10 Proceedings of the 29th conference on Information communications
Competition yields efficiency in load balancing games
Performance Evaluation
| Hi-index | 0.07 |
We study the efficiency implications of competition among profit-maximizing service providers in communication networks. Service providers set prices for transmission of flows through their (sub)network. The central question is whether the presence of prices will help or hinder network performance. We investigate this question by considering the difference between users' willingness to pay and delay costs as the efficiency metric. Previous work has demonstrated that in networks consisting of parallel links, efficiency losses from competition are bounded. Nevertheless, parallel-link networks are special, and in most networks, traffic has to simultaneously traverse links (or subnetworks) operated by independent service providers. The simplest network topology allowing this feature is the parallel-serial structure, which we study in this paper. In contrast to existing results, we show that in the presence of serial links, the efficiency loss relative to the social optimum can be arbitrarily large. The reason for this degradation of performance is the double marginalization problem, whereby each serial provider charges high prices not taking into account the effect of this strategy on the profits of other providers along the same path. Nevertheless, when there are no delay costs without transmission (i.e., latencies at zero are equal to zero), irrespective of the number of serial and parallel providers, the efficiency of strong oligopoly equilibria can be bounded by 1/2, where strong oligopoly equilibria are equilibria in which each provider plays a strict best response and all of the traffic is transmitted. However, even with strong oligopoly equilibria, inefficiency can be arbitrarily large when the assumption of no delay costs without transmission is relaxed.