On Competing Wireless Service Providers

TL;DR

This paper analyzes the competition between wireless service providers with heterogeneous users, proving the existence and uniqueness of Nash equilibria and showing that two providers' competition can lead to globally optimal outcomes.

Contribution

It establishes the existence and uniqueness of Nash equilibria in a competitive wireless market with heterogeneous users and extends results to multiple providers.

Findings

Two-provider competition leads to globally optimal outcomes.

Nash equilibrium exists and is unique under generic channel models.

Numerical examples illustrate parameter effects on equilibrium.

Abstract

We consider a situation where wireless service providers compete for heterogenous wireless users. The users differ in their willingness to pay as well as in their individual channel gains. We prove existence and uniqueness of the Nash equilibrium for the competition of two service providers, for a generic channel model. Interestingly, the competition of two providers leads to a globally optimal outcome. We extend some of the results to the case where more than two providers are competing. Finally, we provide numerical examples that illustrate the effects of various parameters on the Nash equilibrium.