Competitive equilibrium and stable coalition in overlay environments

Overlay networks have been widely deployed upon the Internet to provide improved network services. However, the interaction between overlay and traffic engineering (TE) as well as among co-existing overlays may occur. In this paper, we adopt game theoretic approaches to analyze this hybrid interaction. Firstly, we model a situation of the hybrid interaction as an n+1-player non-cooperative game, where overlays and TE are of equal status, and prove the existence of Nash equilibrium (NE). Secondly, we model another situation of the hybrid interaction as a 1-leadern-follower Stackelberg-Nash game, where TE is the leader and coexisting overlays are followers, and prove that the cost at Stackelberg-Nash equilibrium (SNE) is at least as good as that at NE for TE. Thirdly, we propose a cooperative coalition mechanism based on Shapley value to overcome the inherent inefficiency of NE and SNE, where players can improve their performance and form stable coalitions.