Responsive pricing modeled with Stackelberg game for next-generation networks

In this paper, we study the problem of resource allocation between users in next-generation networks. The starting assumption is that the service provider tries to come up with convincing offers of service level to subscribers, based on demand responsive pricing scheme, while trying to maximize its profit. We developed two algorithms with different usage-based pricing strategies. Both algorithms solve pricing optimization problem using Stackelberg game with service provider acting as a leader and users behaving as followers. We developed the bandwidth management server to perform automatic optimal bandwidth allocation to each user's session and maximize its expected utility while maximizing the overall service provider's revenue. For both algorithms, we also performed the procedure for optimization of the capacity offered to users.