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1st International ICST Workshop on Game theory for Communication networks

Research Article

Pricing under Information Asymmetry for a Large Population of Users

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  • @INPROCEEDINGS{10.4108/gamecomm.2007.2007,
        author={Hongxia  Shen and Tamer Başar},
        title={Pricing under Information Asymmetry for a Large Population of Users},
        proceedings={1st International ICST Workshop on Game theory for Communication networks},
        proceedings_a={GAMECOMM},
        year={2010},
        month={5},
        keywords={Nonlinear pricing incomplete information information asymmetry incentives active pricing},
        doi={10.4108/gamecomm.2007.2007}
    }
    
  • Hongxia Shen
    Tamer Başar
    Year: 2010
    Pricing under Information Asymmetry for a Large Population of Users
    GAMECOMM
    ICST
    DOI: 10.4108/gamecomm.2007.2007
Hongxia Shen1,*, Tamer Başar2,*
  • 1: Department of Electrical Engineering and Computer Science Northwestern University Evanston, IL 60208, USA
  • 2: Department of Electrical and Co Engineering & Coordinated Science Laboratory University of Illinois Urbana, IL 61801, USA
*Contact email: hshen@eecs.northwestern.edu, tbasar@control.csl.uiuc.edu

Abstract

In this paper, we study optimal nonlinear pricing policy design for a monopolistic network service provider in the face of a large population of users. We assume that users have stochastic types. In [1], games with information symmetry have been considered; that is, users' true types may be public information available to all parties, or each user's true type may be private information known only to that user. In this paper, we study the intermediate case with information asymmetry; that is, users' true types are shared information among users, but are not disclosed to the service provider. The problem can be formulated as an incentive-design problem, and an ε-team optimal incentive (pricing) policy is obtained, which almost achieves Pareto optimality for the service provider. A comparative study between games with information symmetry and asymmetry are conducted as well to evaluate the service provider's game preferences.

Keywords
Nonlinear pricing incomplete information information asymmetry incentives active pricing
Published
2010-05-16
Modified
2011-09-15
http://dx.doi.org/10.4108/gamecomm.2007.2007
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