Understanding the impact of loyal user behaviour on Internet access pricing

A game-theoretic framework

Tuan Anh Trinh, Laszlo Gyarmati, Gyula Sallai

Research output: Contribution to journalArticle

4 Citations (Scopus)

Abstract

In this paper, we investigate the impacts of user behaviour-user loyalty in particular-on pricing strategies of Internet Service Providers (ISPs) for a profitable yet sustainable Internet access marketplace. We carry out an extensive empirical analysis of customer loyalty issues of ISP markets including our own survey in the Hungarian ISP market. Based on the empirical results, we propose a realistic user loyalty model, the price difference dependent loyalty model. Next, we apply the loyalty model in game-theoretical framework where optimal Internet access pricing strategies are expressed. Our game-theoretic framework includes both short-term and long-term interaction cases (single-shot and repeated games, respectively) and is capable of dealing with uncertain as well as dynamic scenarios (Bayesian and Stackelberg games, respectively). Finally, we present the impacts of user loyalty on the prices and profits of ISPs in different scenarios based on simulation results.

Original languageEnglish
Pages (from-to)43-61
Number of pages19
JournalTelecommunication Systems
Volume48
Issue number1-2
DOIs
Publication statusPublished - 1 Oct 2011
Externally publishedYes

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Internet service providers
Internet
Costs
Profitability

Keywords

  • Game-theoretic modelling and analysis
  • Internet pricing
  • User behaviour modelling

ASJC Scopus subject areas

  • Electrical and Electronic Engineering

Cite this

Understanding the impact of loyal user behaviour on Internet access pricing : A game-theoretic framework. / Trinh, Tuan Anh; Gyarmati, Laszlo; Sallai, Gyula.

In: Telecommunication Systems, Vol. 48, No. 1-2, 01.10.2011, p. 43-61.

Research output: Contribution to journalArticle

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