On competition for market share in a dynamic ISP market with customer loyalty: A game-theoretic analysis

Laszlo Gyarmati, Tuan Anh Trinh

Research output: Chapter in Book/Report/Conference proceedingConference contribution

1 Citation (Scopus)

Abstract

Customer loyalty as part of user behaviour has significant impact on the Internet Service Providers' (ISPs) price setting strategies as shown recently in [1,2,3,4]. However, the issue of a dynamic ISP market, where new ISPs enter the market and try to increase their market shares by offering favourable access prices for incumbent ISPs' loyal customers, has not been addressed yet. Furthermore, the cost of entrance is not yet properly dealt with in the previous studies. In this paper, we use the tools from game theory to understand the competition for market share in a dynamic ISP market with customer loyalty. We model the situation by a Stackelberg leader-follower game, and use the model to compute the Nash/Stackelberg equilibria of the game with customer loyalty and different cost models. For simple cost models, we give explicit formulas for the equilibria of the games. For more complex cost models, we use approximation and simulations to illustrate the dynamics of market shares in these situations. ́ Springer-Verlag Berlin Heidelberg 2009.

Original languageEnglish
Title of host publicationLecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
Pages11-23
Number of pages13
Volume5539 LNCS
DOIs
Publication statusPublished - 17 Jul 2009
Externally publishedYes
Event6th International Workshop on Internet Charging and QoS Technologies, ICQT 2009 - Aachen, Germany
Duration: 11 May 200915 May 2009

Publication series

NameLecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
Volume5539 LNCS
ISSN (Print)03029743
ISSN (Electronic)16113349

Other

Other6th International Workshop on Internet Charging and QoS Technologies, ICQT 2009
CountryGermany
CityAachen
Period11/5/0915/5/09

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ASJC Scopus subject areas

  • Computer Science(all)
  • Theoretical Computer Science

Cite this

Gyarmati, L., & Trinh, T. A. (2009). On competition for market share in a dynamic ISP market with customer loyalty: A game-theoretic analysis. In Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics) (Vol. 5539 LNCS, pp. 11-23). (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics); Vol. 5539 LNCS). https://doi.org/10.1007/978-3-642-01796-4_3