On Competition between Greedy Autonomous Systems in Providing Internet Services: Emergent Behavior and Stability

摘要

We consider the effect of competition between two greedy autonomous systems on pricing and availability of Internet services with elastic demand. The problem is formalized in two different ways: (1) as a non-cooperative game, where the autonomous systems attempt to maximize their profits by adjusting prices and bandwidths, and (2) as a natural evolutionary algorithm, where the behaviors of the autonomous systems are modeled by a system of nonlinear differential equations. To investigate the stability of this evolutionary system, we also consider a system of fixed-point equations describing the global behavior. Necessary conditions are presented for equilibria of the game and the evolutionary algorithm, and analytical solutions are found that give the optimal capacities and the corresponding utilities. The economic implications of competition on both the users and the autonomous systems are quantified.