Strategic Pricing and Resource Allocation: Framework and

190 Pages·2012·1.4 MB·English

UNIVERSITY OF CALIFORNIA
LosAngeles
Strategic Pricing and Resource Allocation:
Framework and Applications
Adissertationsubmittedinpartialsatisfaction
oftherequirementsforthedegree
DoctorofPhilosophyinElectricalEngineering
by
Shaolei Ren
2012
(cid:176)c Copyrightby
ShaoleiRen
2012
ABSTRACT OF THE DISSERTATION
Strategic Pricing and Resource Allocation:
Framework and Applications
by
Shaolei Ren
DoctorofPhilosophyinElectricalEngineering
UniversityofCalifornia,LosAngeles,2012
ProfessorMihaelavanderSchaar,Chair
Enabledbyubiquitousbroadbandconnectivityandseamlesswirelessconnections,
wehavewitnessedinthepastfewyearstheemergenceofaplethoraofwirelessappli-
cations,rangingfromdatacommunicationsandsocialnetworkingtothemorerecently
wireless cloud computing. The growing tension between the exploding demand for
such wireless applications and the increasingly scarce network resources (e.g., spec-
trum, power) has urged a rethinking of the service providers’ pricing strategies and
network resource management techniques to cope with potential threats of quality-of-
service degradation and revenue decreases. Specifically, it has become of paramount
importance for service providers to strategically redesign their pricing policies and to
understandhowvariouspricingpolicieswillaffecttheservicedemand,competitionin
themarket,aswellasthenetworkresourcemanagement.
In this dissertation, I propose a novel framework to optimize a service provider’s
pricing policy as well as its network resource allocation decision for profit maximiza-
tion, in the presence of self-interested participating users that strategically respond
to the charged price to maximize their own benefits. Applicable to both static and
stochastic environments, the proposed framework explicitly takes into account user
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heterogeneity, which is observed in a wide range of applications. Based on the frame-
work, I investigate the problem of optimizing pricing and resource allocation for the
service provider’s profit maximization in various contexts, including cooperative re-
lay networks, communications markets, online user-generated content platforms, and
mobilecloudcomputingsystems.
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ThedissertationofShaoleiRenisapproved.
AliH.Sayed
JasonL.Speyer
WilliamZame
PhilipA.Chou
MihaelavanderSchaar,CommitteeChair
UniversityofCalifornia,LosAngeles
2012
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Tomywife.
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TABLE OF CONTENTS
1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Motivation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 KeyChallenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 ContributionsoftheDissertation . . . . . . . . . . . . . . . . . . . . 3
1.3.1 Chapter 2: Pricing and Power Control in Wireless Relay Net-
works . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.3.2 Chapter3: PricinginWirelessCommunicationsMarkets . . . 5
1.3.3 Chapter4: PricinginOnlineUser-GeneratedContentPlatforms 6
1.3.4 Chapter5: PricingandSchedulinginWirelessCloudComputing 6
1.3.5 Chapter6: Conclusion . . . . . . . . . . . . . . . . . . . . . 7
2 PricingandDistributedPowerControlinWirelessRelayNetworks. . . 8
2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.2 RelatedWorks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.3 SystemModel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.3.1 NetworkModel . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.3.2 ProblemFormulation . . . . . . . . . . . . . . . . . . . . . . 16
2.4 User-CentricOptimizationandPricing . . . . . . . . . . . . . . . . . 18
2.4.1 DistributedPowerAllocation . . . . . . . . . . . . . . . . . . 18
2.4.2 UniformPricingWithIncompleteInformation . . . . . . . . 23
2.4.3 DifferentiatedPricingWithCompleteInformation . . . . . . 30
2.4.4 SystemUtilityMaximization . . . . . . . . . . . . . . . . . . 33
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2.5 NumericalResults . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.5.1 HomogeneousNetworkTopology . . . . . . . . . . . . . . . 37
2.5.2 HeterogeneousNetworkTopology . . . . . . . . . . . . . . . 41
2.6 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
3 DataDemandDynamicsinWirelessCommunicationsMarkets . . . . . 45
3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
3.2 RelatedWorks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
3.3 Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
3.3.1 WSPModel . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
3.3.2 UserModel . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
3.4 WirelessCommunicationsMarket: SingleDataPlan . . . . . . . . . 56
3.4.1 Users’SubscriptionDecisions . . . . . . . . . . . . . . . . . 56
3.4.2 WSP’sDataPlanDecision . . . . . . . . . . . . . . . . . . . 66
3.4.3 WSP’sCapacityDecision . . . . . . . . . . . . . . . . . . . 68
3.5 WirelessCommunicationsMarket: TwoDataPlans . . . . . . . . . . 69
3.5.1 Users’SubscriptionDecisions . . . . . . . . . . . . . . . . . 69
3.5.2 WSP’sDataPlanDecision . . . . . . . . . . . . . . . . . . . 77
3.5.3 WSP’sCapacityDecision . . . . . . . . . . . . . . . . . . . 78
3.6 NumericalResults . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
3.6.1 Singledataplan . . . . . . . . . . . . . . . . . . . . . . . . . 80
3.6.2 Twodataplans . . . . . . . . . . . . . . . . . . . . . . . . . 83
3.7 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
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4 MaximizingProfitonUser-GeneratedContentPlatforms . . . . . . . . 88
4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
4.2 RelatedWorks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
4.3 Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
4.3.1 Intermediary . . . . . . . . . . . . . . . . . . . . . . . . . . 92
4.3.2 ContentProducers . . . . . . . . . . . . . . . . . . . . . . . 94
4.3.3 ContentViewers . . . . . . . . . . . . . . . . . . . . . . . . 97
4.4 ProfitMaximizationonContentPlatforms . . . . . . . . . . . . . . . 100
4.4.1 OptimalContentViewing . . . . . . . . . . . . . . . . . . . 101
4.4.2 EquilibriumContentProduction . . . . . . . . . . . . . . . . 101
4.4.3 OptimalPrice . . . . . . . . . . . . . . . . . . . . . . . . . . 106
4.5 ExtensiontoHeterogeneousProductionCosts . . . . . . . . . . . . . 112
4.5.1 OptimalContentViewing . . . . . . . . . . . . . . . . . . . 113
4.5.2 EquilibriumContentProduction . . . . . . . . . . . . . . . . 113
4.5.3 OptimalPrice . . . . . . . . . . . . . . . . . . . . . . . . . . 117
4.6 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
5 DynamicSchedulingandPricinginWirelessCloudComputing . . . . . 121
5.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
5.2 RelatedWorks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
5.3 Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
5.3.1 ServiceProvider . . . . . . . . . . . . . . . . . . . . . . . . 129
5.3.2 Users . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
5.3.3 Extensiontomultipleserviceclasses . . . . . . . . . . . . . . 137
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5.4 DynamicPricingandCapacityProvisioning . . . . . . . . . . . . . . 138
5.4.1 Offlineproblemformulation . . . . . . . . . . . . . . . . . . 139
5.4.2 OnlineAlgorithm . . . . . . . . . . . . . . . . . . . . . . . . 140
5.4.3 PerformanceAnalysis . . . . . . . . . . . . . . . . . . . . . 143
5.5 NumericalResults . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
5.5.1 Setup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
5.5.2 ExperimentalResults . . . . . . . . . . . . . . . . . . . . . . 154
5.6 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
6 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
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