Web Service Providers\' Game on Price and Service Level

• Main Authors: Ali Habibi Badrabadi, Mohammad Jafar Tarokh
• Format: Article
• Language: English
• Published: Iran University of Science & Technology 2010-12-01
• Series: International Journal of Industrial Engineering and Production Research
• Subjects: Web Service Providers; Pricing; Game theory; Queuing theory; Competition; Complimentarity
• Online Access: http://ijiepr.iust.ac.ir/browse.php?a_code=A-10-95-5&slc_lang=en&sid=1

Response time is one of the critical web service quality dimensions. It refers to how long it takes that a web service responds to request of a user. In order to manage the response time, pricing schemes can work as an efficient access control mechanism. In this paper, we study competition between two providers offering functionally same web services where there is a monopoly service provider. The monopoly offers a service that is complementary to their services. Each provider needs to decide a service level (L or H) and a corresponding price for the selected service level to meet the service level guarantee. We construct a Stackelberg game and benefit from queuing theory concept to propose a model that can examine strategic choices of the providers .