IDEAS home Printed from https://ideas.repec.org/a/kap/netnom/v22y2022i2d10.1007_s11066-022-09156-4.html
   My bibliography  Save this article

A bandwidth auction mechanism to enable affordable internet access

Author

Listed:
  • Luis Andres Marentes

    (Universidad de los Andes)

  • Sergio Cabrales

    (Universidad de los Andes)

  • Tilman Wolf

    (University of Massachusetts)

  • Anna Nagurney

    (University of Massachusetts)

  • Yezid Donoso

    (Universidad de los Andes)

Abstract

Although technological developments have provided momentum to extend the frontier of commercially feasible network deployments, the latest data from ITU regarding affordability of ICT services shows that the digital divide between the rich and poor is still an open issue. Therefore, an economic framework is needed to create conditions for affordable network services. In this paper, we propose a set-aside mechanism that can satisfy this need by reserving resources for targeted groups and resolving the practical problem of having greedy users that rationally compete for cheaper resources. In this mechanism, prices are tailored to users’ budget capacities. Our simulation results indicate that it is possible to increase the resource allocation for delivering services to the poorest by inducing regular users to compete among themselves.

Suggested Citation

  • Luis Andres Marentes & Sergio Cabrales & Tilman Wolf & Anna Nagurney & Yezid Donoso, 2022. "A bandwidth auction mechanism to enable affordable internet access," Netnomics, Springer, vol. 22(2), pages 283-316, October.
    • Handle: RePEc:kap:netnom:v:22:y:2022:i:2:d:10.1007_s11066-022-09156-4
    DOI: 10.1007/s11066-022-09156-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11066-022-09156-4
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11066-022-09156-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Isabel Amigo & Pablo Belzarena & Sandrine Vaton, 2013. "A pricing scheme for QoS in overlay networks based on first-price auctions and reimbursement," Netnomics, Springer, vol. 14(1), pages 69-93, November.
    2. Susan Athey & Dominic Coey & Jonathan Levin, 2013. "Set-Asides and Subsidies in Auctions," American Economic Journal: Microeconomics, American Economic Association, vol. 5(1), pages 1-27, February.
    3. Patrick Maillé & Bruno Tuffin, 2003. "The Progressive Second Price Mechanism in a Stochastic Environment," Netnomics, Springer, vol. 5(2), pages 119-147, November.
    4. Aurel Lazar & Nemo Semret, 1998. "Design, Analysis and Simulation of the Progressive Second Price Auction for Network Bandwidth Sharing," Game Theory and Information 9809001, University Library of Munich, Germany.
    5. Michael Falk, 1989. "A note on uniform asymptotic normality of intermediate order statistics," Annals of the Institute of Statistical Mathematics, Springer;The Institute of Statistical Mathematics, vol. 41(1), pages 19-29, March.
    6. Luis Marentes & Tilman Wolf & Anna Nagurney & Yezid Donoso & Harold Castro, 2014. "Overcoming economic challenges of internet operators in low income regions through a delay tolerant architecture with mechanic backhauls," Netnomics, Springer, vol. 15(3), pages 183-213, November.
    7. Michael H. Rothkopf & Ronald M. Harstad & Yuhong Fu, 2003. "Is Subsidizing Inefficient Bidders Actually Costly?," Management Science, INFORMS, vol. 49(1), pages 71-84, January.
    8. Hubbard, Timothy P. & Paarsch, Harry J., 2009. "Investigating bid preferences at low-price, sealed-bid auctions with endogenous participation," International Journal of Industrial Organization, Elsevier, vol. 27(1), pages 1-14, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Luis Andres Marentes & Sergio Cabrales & Tilman Wolf & Anna Nagurney & Yezid Donoso, 2021. "A bandwidth auction mechanism to enable affordable internet access," Netnomics, Springer, vol. 22(2), pages 283-316, December.
    2. José Alcalde & Matthias Dahm, "undated". "Supplier Diversity before the Time of Cholera," Discussion Papers in Economics 20/07, Division of Economics, School of Business, University of Leicester.
    3. Barbosa, Klenio & Boyer, Pierre C., 2021. "Discrimination in Dynamic Procurement Design with Learning-by-doing," International Journal of Industrial Organization, Elsevier, vol. 77(C).
    4. Alcalde, José & Dahm, Matthias, 2020. "Affirmative Action Through Endogenous Set-Asides," QM&ET Working Papers 20-1, University of Alicante, D. Quantitative Methods and Economic Theory.
    5. Rosa, Benjamin, 2016. "Subcontracting Requirements and the Cost of Government Procurement," MPRA Paper 77392, University Library of Munich, Germany.
    6. Domenico Colucci & Nicola Doni & Vincenzo Valori, 2015. "Information policies in procurement auctions with heterogeneous suppliers," Journal of Economics, Springer, vol. 114(3), pages 211-238, April.
    7. Domenico Colucci & Nicola Doni & Vincenzo Valori, 2012. "Information revelation in procurement auctions: an equivalence result," Working Papers - Mathematical Economics 2012-07, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    8. Rosa, Benjamin V., 2022. "Bid credits in simultaneous ascending auctions," Games and Economic Behavior, Elsevier, vol. 132(C), pages 189-203.
    9. Benjamin V. Rosa, 2019. "Resident Bid Preference, Affiliation, and Procurement Competition: Evidence from New Mexico," Journal of Industrial Economics, Wiley Blackwell, vol. 67(2), pages 161-208, June.
    10. Vivek Bhattacharya & James W. Roberts & Andrew Sweeting, 2014. "Regulating bidder participation in auctions," RAND Journal of Economics, RAND Corporation, vol. 45(4), pages 675-704, December.
    11. Paulo R. C. Reis & Sandro Cabral, 2015. "Public procurement strategy: the impacts of a preference programme for small and micro businesses," Public Money & Management, Taylor & Francis Journals, vol. 35(2), pages 103-110, March.
    12. Sweeting, Andrew & Bhattacharya, Vivek, 2015. "Selective entry and auction design," International Journal of Industrial Organization, Elsevier, vol. 43(C), pages 189-207.
    13. Alcalde, José & Dahm, Matthias, 2013. "Competition for procurement shares," Games and Economic Behavior, Elsevier, vol. 80(C), pages 193-208.
    14. Colucci, Domenico & Doni, Nicola & Valori, Vincenzo, 2012. "Preferential treatment in procurement auctions through information revelation," Economics Letters, Elsevier, vol. 117(3), pages 883-886.
    15. Olga Chiappinelli & Gyula Seres, 2021. "Optimal Discounts in Green Public Procurement," Discussion Papers of DIW Berlin 1983, DIW Berlin, German Institute for Economic Research.
    16. Butler, Jeffrey V. & Carbone, Enrica & Conzo, Pierluigi & Spagnolo, Giancarlo, 2020. "Past performance and entry in procurement: An experimental investigation," Journal of Economic Behavior & Organization, Elsevier, vol. 173(C), pages 179-195.
    17. Hu, Audrey & Offerman, Theo & Zou, Liang, 2011. "Premium auctions and risk preferences," Journal of Economic Theory, Elsevier, vol. 146(6), pages 2420-2439.
    18. Marion, Justin, 2007. "Are bid preferences benign? The effect of small business subsidies in highway procurement auctions," Journal of Public Economics, Elsevier, vol. 91(7-8), pages 1591-1624, August.
    19. Jehiel, Philippe & Lamy, Laurent, 2014. "On discrimination in procurement auctions," CEPR Discussion Papers 9790, C.E.P.R. Discussion Papers.
    20. Manzano, Carolina & Vives, Xavier, 2021. "Market power and welfare in asymmetric divisible good auctions," Theoretical Economics, Econometric Society, vol. 16(3), July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:netnom:v:22:y:2022:i:2:d:10.1007_s11066-022-09156-4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.