Competitive pricing with demand heterogeneity in open wireless access market

In order to maximize the network profit competitive service providers shall utilize their resources efficiently and price their services taking into account the demand responsiveness in the market. Pricing strategies play an important role in the network performance since they explicitly influence the user demand. Demand uncertainty would cause providers to face lower profits. In this paper, we analyze the price-demand relationship and based on that, we study a competitive pricing game and address an open wireless access market (with different market shares) where service providers´ objective is to maximize their profits. The resources are allocated among the users through a proportionally fair divisible auction mechanism. Simulation results show that a resource allocation model, which attracts users to actively participate in the auction, assures fair access while maintaining service providers´ profit by adapting the pricing policy with a change in the user demand. Our analysis reveals that the service providers can establish a competitive price of the resources, while capturing a reasonable portion of market share. Under this setting, service providers could learn and predict which pricing policy is beneficial in a competitive environment.