Revenue sharing among ISPs in two-sided markets

Yuan Wu, Hongseok Kim, Prashanth H. Hande, Mung Chiang, Danny H.K. Tsang

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

47 Scopus citations


In this paper, we study the revenue sharing and rate allocation for Internet Service Providers (ISPs) that jointly provide network connectivity between content providers and end-users. Without colluding, each ISP may selfishly set a high transit-price to cover its cost and maximize its own profit, which inevitably results in a loss in social profit. We model this noncooperative interaction between an "eyeball" ISP and a content ISP as a Stackelberg game and quantify the resulting loss in social profit. To recover the profit loss, we propose a revenue sharing contract between ISPs by modeling them as a supply chain to deliver traffic in a two-sided market. Parameterized by the profit division factor, the sharing contract coordinates ISPs' objectives such that they aim to maximize the social profit self-incentively. We further propose a Nash bargaining process to determine the profit division factor such that all ISPs are simultaneously better off compared to the noncooperative equilibrium.

Original languageEnglish (US)
Title of host publication2011 Proceedings IEEE INFOCOM
Number of pages5
StatePublished - 2011
EventIEEE INFOCOM 2011 - Shanghai, China
Duration: Apr 10 2011Apr 15 2011

Publication series

NameProceedings - IEEE INFOCOM
ISSN (Print)0743-166X



All Science Journal Classification (ASJC) codes

  • General Computer Science
  • Electrical and Electronic Engineering


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