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| Content Provider | IEEE Xplore Digital Library |
|---|---|
| Author | Lingjie Duan Jianwei Huang Biying Shou |
| Copyright Year | 2013 |
| Description | Author affiliation: Eng. Syst. & Design Pillar, Singapore Univ. of Technol. & Design, Singapore, Singapore (Lingjie Duan) || Dept. of Inf. Eng., Chinese Univ. of Hong Kong, Hong Kong, China (Jianwei Huang) || Dept. of Manage. Sci., City Univ. of Hong Kong, Hong Kong, China (Biying Shou) |
| Abstract | This paper analyzes two pricing schemes commonly used in WiFi markets: flat-rate pricing and usage-based pricing. The flat-free pricing encourages users to achieve the maximum WiFi usage and targets at users with high valuations in mobile Internet access, whereas the usage-based pricing is flexible to attract more users - even those with low valuations. First, we show that for a local provider, the flat-rate pricing provides more revenue than the usage-based pricing, which is consistent with the common practice in today's local markets. Second, we study how Skype may work with many local WiFi providers to provide a global WiFi service. We formulate the interactions between Skype, local providers, and users as a two-stage dynamic game. In Stage I, Skype bargains with each local provider to determine the global Skype WiFi service price and revenue sharing agreement; in Stage II, local users and travelers decide whether and how to use local or Skype WiFi service. Our analysis discovers two key insights behind Skype's current choice of usage-based pricing for its global WiFi service: to avoid severe competition with local providers and attract travelers to the service. We further show that at the equilibrium, Skype needs to share the majority of his revenue with a local provider to compensate the local provider's revenue loss due to competition. When there are more travelers or fewer local users, the competition between Skype and a local provider becomes less severe, and Skype can give away less revenue and reduce its usage-based price to attract more users. |
| Starting Page | 1088 |
| Ending Page | 1096 |
| File Size | 267948 |
| Page Count | 9 |
| File Format | |
| ISBN | 9781467359443 |
| ISSN | 0743166X |
| e-ISBN | 9781467359467 |
| DOI | 10.1109/INFCOM.2013.6566899 |
| Language | English |
| Publisher | Institute of Electrical and Electronics Engineers, Inc. (IEEE) |
| Publisher Date | 2013-04-14 |
| Publisher Place | Italy |
| Access Restriction | Subscribed |
| Rights Holder | Institute of Electrical and Electronics Engineers, Inc. (IEEE) |
| Subject Keyword | IEEE 802.11 Standards Pricing Cost accounting Internet Games Elasticity Educational institutions |
| Content Type | Text |
| Resource Type | Article |
| Subject | Computer Science Electrical and Electronic Engineering |
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