A Hierarchical Game with Strategy Evolution for Mobile Sponsored Content and Service Markets

TL;DR

This paper models a hierarchical game involving mobile users, content providers, and network operators, incorporating strategy evolution and network effects to analyze sponsored content markets and propose an equilibrium algorithm.

Contribution

It introduces a novel hierarchical game framework with evolutionary dynamics and global network effects for sponsored content markets, along with a distributed equilibrium algorithm.

Findings

Sponsoring increases provider profits and user experience.

The proposed algorithm converges reliably to equilibrium.

Global network effects significantly influence market dynamics.

Abstract

In sponsored content and service markets, the content and service providers are able to subsidize their target mobile users through directly paying the mobile network operator, to lower the price of the data/service access charged by the network operator to the mobile users. The sponsoring mechanism leads to a surge in mobile data and service demand, which in return compensates for the sponsoring cost and benefits the content/service providers. In this paper, we study the interactions among the three parties in the market, namely, the mobile users, the content/service providers and the network operator, as a two-level game with multiple Stackelberg (i.e., leader) players. Our study is featured by the consideration of global network effects owning to consumers' grouping. Since the mobile users may have bounded rationality, we model the service-selection process among them as an evolutionary-population follower sub-game. Meanwhile, we model the pricing-then-sponsoring process between the content/service providers and the network operator as a non-cooperative equilibrium searching problem. By investigating the structure of the proposed game, we reveal a few important properties regarding the equilibrium existence, and propose a distributed, projection-based algorithm for iterative equilibrium searching. Simulation results validate the convergence of the proposed algorithm, and demonstrate how sponsoring helps improve both the providers' profits and the users' experience.