A Nash–Stackelberg equilibrium model for internet and network service providers in the demand market—a scenario-based approach

This paper evaluates the optimal pricing for two Internet service providers and two network providers; all are competing on price, which is based on quality. To find the optimal prices of service and network providers and to determine optimal scenarios, a two-stage competition is modeled. In the first stage, network providers compete on market prices by setting the quality in four scenarios. At this stage, we found the equilibrium prices in the market. In the second stage, by obtaining market prices, service providers compete on network prices. Finally, the equilibrium solutions are compared with each other by considering the intensity of market competition in price and quality. It is shown that equilibrium never occurs in the case when the smaller service provider has a higher Internet quality than the other (scenario 2) and the more significant service provider offers a higher Internet quality (scenario 4). Besides, when both Internet service providers offer low-quality Internet (scenario 1) and high-quality Internet (scenario 3), the companies make the most profit. By increasing and decreasing the competition in quality, equilibrium would still exist for the first scenario, and the third scenario, respectively. The intensity of market competition in price behaves oppositely as quality.

     

Economic and system impact of hybrid Raman–EDFA amplification in a 40 × 40 Gbps optical transmission network with DPSK modulation

Demands of modern high-bandwidth services drive the need to constantly improve existing optical amplification technology beyond its current bounds. In this paper, we demonstrate a hybrid broadband amplification scheme which is capable of improving the system performance of a wavelength-division-multiplexed (WDM) network. We present the study of optical signals with differential-phase-shift keying (DPSK) modulation at 40 Gbps and its transmission in a 50-GHz spaced, 40-channel WDM system over an 80-km link with hybrid optical amplification. A comparison of the system and cost impacts of a Raman-only amplification scheme with two hybrid Raman–erbium doped fiber amplifier schemes (Hybrids I and II) is performed. It is shown that one of the proposed hybrid schemes (Hybrid II) outperforms the other by (i) improving the tolerance to signal input power by 17 dB and (ii) increasing the system reach by 55 km for input signal power of 5 dBm, for a bit error rate (BER) performance of 10⁻¹².