User-centric resource allocation with two-dimensional reverse pricing in mobile communication services

Abstract

Reverse pricing has been recognized as an effective tool to handle demand variability and uncertainty in the travel industry (e.g., airlines and hotels). To investigate its viability in mobile communication services, as a benchmark case, we first consider that a single mobile network operator (MNO) adopts (MNO-driven) forward pricing only, taking into account heterogeneous and stochastic user demands. To effectively deal with the drawbacks of forward pricing only, we propose (user-driven) two-dimensional reverse pricing on top of forward pricing and design a ξ-approximate polynomial-time algorithm that can maximize the revenue of the MNO. Through analytical and numerical results, we show that the proposed scheme can achieve "triple-win" solutions: Higher average network capacity utilization, the increase in the average revenue of the MNO, and the increment in the total average payoff of the users. To verify its feasibility in practice, we further implement its real prototype and perform experimental studies. We show that the proposed scheme still creates triple-win solutions in practice. Our findings provide a new outlook on resource allocation, and design guidelines for adopting two-dimensional reverse pricing on top of forward pricing.