Cooperative Game-Based Pricing and Profit Distribution in P2P Markets

Peer-to-Peer (P2P) technology has been the foundation of many important Internet applications, like Video on Demand (VoD) and file sharing. However, under the traditional pricing mechanism, the fact that most P2P traffic flows among peers can dramatically decrease the profit of ISPs, who may take actions against P2P and impede the development of P2P technology. In this chapter, we develop a mathematical framework to analyze such economic issues. Inspired by the idea from cooperative game theory, we propose a cooperative profit-distribution model based on Nash Bargaining Solution (NBS), in which both eyeball ISPs and Peer-assisted Content Providers (PCPs) form a separate coalition and compute a fair Pareto point to determine profit distribution. Here the eyeball ISPs refer to the ISPs which specialize in delivery to hundreds of thousands of residential users, supporting the last-mile connectivity [8]. Moreover, we design a fair and feasible mechanism for profit distribution within each coalition and give a model to discuss the potential competition among ISPs. We show that such a cooperative method not only guarantees the fair profit distribution among network participators, but also helps improve the economic efficiency of the network system.