An Equilibrium Analysis of a Secondary Mobile Data-Share Market

Abstract

Internet service providers are offering shared data plans where multiple users may buy and sell their overage data in a secondary market managed by the ISP. We propose a game-theoretic approach to a software-defined network for modeling this wireless data exchange market: a fully connected, non-cooperative network. We identify and define the rules for the underlying progressive second price (PSP) auction for the respective network and market structure. We allow for a single degree of statistical freedom—the reserve price—and show that the secondary data exchange market allows for greater flexibility in the acquisition decision making of mechanism design. We have designed a framework to optimize the strategy space using the elasticity of supply and demand. Wireless users are modeled as a distribution of buyers and sellers with normal incentives. Our derivation of a buyer-response strategy for wireless users based on second price market dynamics leads us to prove the existence of a balanced pricing scheme. We examine shifts in the market price function and prove that our network upholds the desired properties for optimization with respect to software-defined networks and prove the existence of a Nash equilibrium in the overlying non-cooperative game.

Keywords

• software-defined networks
• mobile share
• game theory
• second-price auction