Simulation analysis of QoS enabled Internet pricing strategies: flat rate vs. two-part tariff

Author

Shin, Seungjae ; Weiss, Martin B H

Author_Institution

Sch. of Inf. Sci., Pittsburg Univ., PA, USA

fYear

2003

fDate

6-9 Jan. 2003

Abstract

In this paper, we study the influence of QoS pricing strategy in the future QoS Internet market. We create a Bertrand duopoly game model with different pricing schemes: one ISP with flat rate pricing for its QoS service and the other ISP with two part tariff, a combined pricing scheme with flat rate and usage-sensitive pricing. Based on industry survey data, we conduct a simulation of a random number generation method for consumer demand and Internet access hours. Then, we find an equilibrium point of pricing strategy where an ISP with flat rate pricing has higher profit than an ISP with a two-part tariff. Finally, we present an analytical framework for the future QoS Internet pricing strategy.

Keywords

Internet; game theory; pricing; quality of service; random number generation; Bertrand duopoly game model; Internet access hours; QoS Internet market; QoS enabled Internet pricing strategies; consumer demand; flat rate pricing strategy; industry survey data; pricing scheme; random number generation method; simulation analysis; two-part tariff pricing strategy; usage-sensitive pricing; Analytical models; Game theory; Information science; Multiprotocol label switching; Platinum; Pricing; Quality of service; Random number generation; Telecommunication traffic; Web and internet services;

fLanguage

English

Publisher

ieee

Conference_Titel

System Sciences, 2003. Proceedings of the 36th Annual Hawaii International Conference on

Print_ISBN

0-7695-1874-5

Type

conf

DOI

10.1109/HICSS.2003.1174337

Filename

1174337