Surviving in a competitive market of information providers

Abstract

As the processing and transport capacity of the information and communication technologies (ICT) infrastructure increased vastly the last few years, the bottleneck of the information exchange process moved to the end points of the process, i.e. The consumers and the producers of information. On one hand there is the limited time that a consumer has to access the information and on the other hand there is the minimum utility level that a provider needs to provide to the society of consumers to cover it's investment cost. In this paper we present a novel decision model for a set of competing providers that wish to enter a market. It may happen that due to the competition, some competitors will not be able to cover their investment cost and therefore will disappear. We analyze the optimum way of forming the market, in order to maximize the aggregate utility of it. We show that this problem is NP-complete and present a linear programming rounding heuristic algorithm to solve it. Besides, we study a game where every player (provider) is to choose whether to join the market or not. We compute the price of anarchy of the game and present a heuristic algorithm that belongs to the family of best response dynamic algorithms. Systematic experiments on a real world data set have demonstrated the effectiveness of our proposed approach. © 2013 IEEE.