The Economics of Quality Sponsored Data in Non-Neutral Networks

TL;DR

This paper models the economic interactions in non-neutral networks where content providers can sponsor quality of service, analyzing market dynamics and strategies for revenue maximization.

Contribution

It introduces a novel game-theoretic framework for understanding quality sponsoring in non-neutral networks, considering both SP and CP strategies.

Findings

Market equilibria depend on pricing and sponsorship strategies.

SPs balance revenue and user satisfaction in resource allocation.

Different market outcomes arise from sequential and bargaining game models.

Abstract

The growing demand for data has driven the Service Providers (SPs) to provide differential treatment of traffic to generate additional revenue streams from Content Providers (CPs). While SPs currently only provide best-effort services to their CPs, it is plausible to envision a model in near future, where CPs are willing to sponsor quality of service for their content in exchange of sharing a portion of their profit with SPs. This quality sponsoring becomes invaluable especially when the available resources are scarce such as in wireless networks, and can be accommodated in a non-neutral network. In this paper, we consider the problem of Quality-Sponsored Data (QSD) in a non-neutral network. In our model, SPs allow CPs to sponsor a portion of their resources, and price it appropriately to maximize their payoff. The payoff of the SP depends on the monetary revenue and the satisfaction of end-users both for the non-sponsored and sponsored content, while CPs generate revenue through advertisement. We analyze the market dynamics and equilibria in two different frameworks, i.e. sequential and bargaining game frameworks, and provide strategies for (i) SPs: to determine if and how to price resources, and (ii) CPs: to determine if and what quality to sponsor. The frameworks characterize different sets of equilibrium strategies and market outcomes depending on the parameters of the market.