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A game-theoretic evaluation of an ISP business model in caching

Author

Listed:
  • Jörn Künsemöller

    (University of Paderborn)

  • Nan Zhang

    (Aalto University)

  • Kimmo Berg

    (Aalto University)

  • João Soares

    (Portugal Telecom Inovação e Sistemas)

Abstract

Internet traffic volume is increasing and this causes scalability issues in content delivery. This problem can be addressed with different types of caching solutions. The incentives of different stakeholders to pay for these solutions are not known. However, it has been identified that Internet service providers (ISPs) need to be involved in the process of cache deployment due to their ownership of the network. This work evaluates a new business model where ISPs charge content providers (CPs) for a caching service because CPs benefit from more efficient content distribution. We provide conditions for sustainable paid in-network caching and their numerical evaluation in order to aid strategic decision-making by CPs, ISPs, and Cloud storage providers (CSPs). Although ISP caching as a paid service may not be an equilibrium, it turns out to be Pareto optimal at the right pricing. This encourages cooperation between CPs and ISPs. CSPs may choose cache friendly physical locations for their facilities in order to provide the necessary capacity to the ISPs. However, the required amounts are in all likelihood too small to be an incentive for the CSPs. ISP caching as a paid service can be an equilibrium when future benefits are considered and when the ISPs terminate caching-related improvements of service quality for clients who do not pay for caching.

Suggested Citation

  • Jörn Künsemöller & Nan Zhang & Kimmo Berg & João Soares, 0. "A game-theoretic evaluation of an ISP business model in caching," Information Systems Frontiers, Springer, vol. 0, pages 1-16.
    • Handle: RePEc:spr:infosf:v::y::i::d:10.1007_s10796-015-9619-5
    DOI: 10.1007/s10796-015-9619-5
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    References listed on IDEAS

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    1. Peyman FARATIN & David CLARK & Steven BAUER & William LEHR & Patrick GILMORE & Arthur BERGER, 2008. "The Growing Complexity of Internet Interconnection," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(72), pages 51-72, 4th quart.
    2. Kimmo Berg & Mitri Kitti, 2013. "Computing Equilibria in Discounted 2 × 2 Supergames," Computational Economics, Springer;Society for Computational Economics, vol. 41(1), pages 71-88, January.
    3. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, December.
    4. Raymond K. Wong, 2013. "Feasibility and a case study on content optimization services on cloud," Information Systems Frontiers, Springer, vol. 15(4), pages 525-532, September.
    5. Kimmo Berg & Mitri Kitti, 2014. "Equilibrium Paths in Discounted Supergames," Discussion Papers 96, Aboa Centre for Economics.
    6. Mohammad Mehedi Hassan & M. Shamim Hossain & A. M. Jehad Sarkar & Eui-Nam Huh, 2014. "Cooperative game-based distributed resource allocation in horizontal dynamic cloud federation platform," Information Systems Frontiers, Springer, vol. 16(4), pages 523-542, September.
    7. Abreu, Dilip, 1988. "On the Theory of Infinitely Repeated Games with Discounting," Econometrica, Econometric Society, vol. 56(2), pages 383-396, March.
    8. Grove, Nico & Agic, Damir & Sedlmeir, Joachim, 2013. "Reporting policies of ISPs: Do general terms and conditions (GTCs) match with the reality?," 24th European Regional ITS Conference, Florence 2013 88473, International Telecommunications Society (ITS).
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