Paris metro pricing for internet service differentiation

Dongmyung Lee, Taehyun Kim, Jeonghoon Mo, Jinwoo Park

Research output: Chapter in Book/Report/Conference proceedingConference contribution

3 Citations (Scopus)


This paper analyzes the Paris Metro Pricing (PMP) strategy for differentiating Internet service. PMP has several advantages over other pricing schemes that guarantee quality of service (QoS) such as simplicity and less bandwidth overhead. In this paper, we develop a simple analytical model for PMP. We first assume that there is only one network service provider (a monopolist) serving N users and model the user behavior and the provider's profit. Then we derive the optimal ratio of dividing a given network capacity in order to maximize the profit of the service provider. Our results show that, by maximizing providers profit, the subscription is also maximized which can be interpreted as a higher satisfaction of users compared to that of not using PMP. In addition, by taking into account various network types, we show that in a monopoly environment, it is always better to implement PMP regardless of user populations we considered. We then further extend our model to a duopoly setting. We found that there exist no Nash equilibrium even when both providers do not differentiate the network service.

Original languageEnglish
Title of host publicationGame Theory for Networks - Second International ICST Conference, GAMENETS 2011, Revised Selected Papers
Number of pages14
Publication statusPublished - 2012
Event2nd International ICST Conference on Game Theory in Networks, GAMENETS 2011 - Shanghai, China
Duration: 2011 Apr 162011 Apr 18

Publication series

NameLecture Notes of the Institute for Computer Sciences, Social-Informatics and Telecommunications Engineering
Volume75 LNICST
ISSN (Print)1867-8211


Other2nd International ICST Conference on Game Theory in Networks, GAMENETS 2011

All Science Journal Classification (ASJC) codes

  • Computer Networks and Communications


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