Offering Supplementary Network Technologies: Adoption Behavior and Offloading Benefits
Carlee Joe-Wong, Soumya Sen, Sangtae Ha

TL;DR
This paper models user adoption of supplementary network technologies like WiFi to reduce mobile network congestion, analyzing equilibrium behaviors, pricing strategies, and empirical data to optimize provider profits.
Contribution
It introduces a comprehensive model of user adoption dynamics for base and supplementary networks, including equilibrium analysis, pricing strategies, and empirical validation with real usage data.
Findings
Unique equilibrium adoption levels identified
Analytical expressions for revenue-maximizing prices derived
Empirical data informs optimal deployment and offloading strategies
Abstract
To alleviate the congestion caused by rapid growth in demand for mobile data, wireless service providers (WSPs) have begun encouraging users to offload some of their traffic onto supplementary network technologies, e.g., offloading from 3G or 4G to WiFi or femtocells. With the growing popularity of such offerings, a deeper understanding of the underlying economic principles and their impact on technology adoption is necessary. To this end, we develop a model for user adoption of a base technology (e.g., 3G) and a bundle of the base plus a supplementary technology (e.g., 3G + WiFi). Users individually make their adoption decisions based on several factors, including the technologies' intrinsic qualities, negative congestion externalities from other subscribers, and the flat access rates that a WSP charges. We then show how these user-level decisions translate into aggregate adoption…
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Taxonomy
TopicsInnovation Diffusion and Forecasting · Green IT and Sustainability · Digital Platforms and Economics
