Constrained Pricing for Cloud Resource Allocation

Constrained pricing in a cloud computing environment is addressed using game theory. The objective of the model and the game is to enable cloud providers to maximize their revenue while satisfying users by maximizing their utilities. The users net utility is modeled as a function of resource demand with a corresponding price. The game consists in the cloud provider suggesting differentiated prices according to demand and users updating their requests in view of the proposed price. The objective is to determine the optimal suggested prices by the cloud-provider and the optimal user demands. A theoretical model based on Stackelberg game is proposed and a Stackelberg/Nash equilibrium solution is found. Performance results show that rejecting a certain number of users is not the best decision to select. Cloud provider should deploy the right amount of resources to maintain good reputation while satisfying users´ requirements.