Upload
urielle-salinas
View
23
Download
2
Tags:
Embed Size (px)
DESCRIPTION
The Shapley Value: Its Use and Implications on Internet Economics. Richard T.B. Ma Columbia University Dah-ming Chiu, John C.S. Lui The Chinese University of Hong Kong Vishal Misra, Dan Rubenstein Columbia University. Outline. ISP Practices and Associated Problems - PowerPoint PPT Presentation
Citation preview
The Shapley Value: Its Use and Implications on Internet Economics
Richard T.B. Ma
Columbia University
Dah-ming Chiu, John C.S. Lui
The Chinese University of Hong Kong
Vishal Misra, Dan Rubenstein
Columbia University
Outline
• ISP Practices and Associated Problems
• Profit Sharing and Shapley Value
• Shapley Mechanism and Incentive Properties
• Future work
What is an Internet Service Provider (ISP)?
• The Internet is composed of Autonomous Systems (ASes).
• An ISP is a business entity.– Might comprise multiple ASes.– Provide Internet access.
– Objective: maximize profits.
ISP
• Eyeball ISPs– Provide Internet access to customers:– Place Large investment in infrastructure.– E.g. AT&T, Verizon …
• Content ISPs– Provide contents via the Internet.– Serve customers like:
• Transit ISPs– Tier 1 ISPs: global connectivity of the Internet.– Provide transit services for other ISPs.– Cover a large geographic area.
Different classes of players
Service Differentiation Information Neutrality
Net Neutrality Debate: Whether or not to provider Service Differentiation?
Network Balkanization: De-peering between ISPs
Level 3 Cogent
ISP Settlement Problems: a Macro Perspective
How to appropriately share profits among ISP?
Transit Eyeball
Transit Transitzero-dollar peering
Content Providers
Three levels of decisions• Interconnecting decision E• Routing decisions R (via BGP)• Bilateral financial settlements
Shortest Path Routing
Hot-potato Routing
Source
Destination
Peering relationship
Customer/provider relationship
Provider ISP
Customer ISPCustomer ISP
Settlement affects E, R
provider charges, customer might want
to save money
Interconnection withdrawal
Route change
ISP Practices: a Micro Perspective
• Consider a PC market with only one operating system provider and one micro-processor provider.
• Egalitarian profit sharing:
Profit V= Revenue - Cost
How to share profit? -- the baseline case
j( )=j( ) = V21
• Symmetry: two micro-processor providers obtain the same profit.
• Efficiency: summation of three companies’ profit equal V.
• Balanced Contribution:
How to share profit? -- more players
j( )=j( )
j( )+j( )+j( ) = V
j( ) - V = j( ) - 021
32
V 61
V
61
V
• The unique solution (Shapley value) that satisfies Efficiency Symmetry and Balanced Contribution:
B1
B2
Bn
C2
C1
Cm
j(B )= V, j(C ) = Vm(n+m)
nn(n+m)
m
How to share profit? -- eyeball and content ISPs
• Intuitions and explanations– The more of the same kind provide substitutions.
– The less of a kind can obtain more leverage.
C2
C1
Cm
B1
B2
Bn
j(B )= V, j(C ) = Vm(n+m)
nn(n+m)
m
Results and implications of ISP profit sharing
• Each ISP’s profit is– Inversely proportional to the
number of ISPs of its type.
– Proportional to the number of ISPs of the opposite type.
Recall: three levels of decisions• Interconnecting decision E• Routing decisions R• Bilateral financial settlements
Peering relationship
Customer/provider relationship
Provider ISP
Customer ISP
Settlement affects E, R
The Shapley value settlementsj
j(E,R)$$$
$$
$$
jcollects revenue from customers
jredistributes profits to ISPs
E, R follow from j
A clean-slate multilateral settlement
Local decisions: Ei,Ri
Ei
Ri
Given:j
Objective: to maximizeji(E,R)
Each ISP makes local interconnecting and routing decisions.
Individual ISP’s selfish behavior
• Assumptions:– Aggregate Profit = Total Revenue – Total Routing Cost.– Profits are distributed via the Shapley value solution.– Fixed interconnecting topology.– ISPs locally decide routes to maximize their profits.
• Theorem (Incentive for routing): Any ISP maximizes its profit by locally minimizing the global routing cost.– Implication: ISPs adapt to global min-cost routes.
• Corollary (Nash Equilibrium): Any global min cost routing decision is a Nash equilibrium for the set of all ISPs.– Implication: global min-cost routes are stable.
Surprise: Selfish local behavior coincides with global optimal solution!
Incentive results -- optimal routing
Incentive results -- interconnecting
• Assumptions:– Aggregate Profit = Total Revenue – Total Routing Cost.– Profits are distributed via the Shapley value solution.– For any topology, ISPs use global min-cost routes.– ISPs locally decide interconnections to maximize their profits.
• Theorem (Incentive for interconnecting): Both interconnecting ISPs have non-decreasing profits.– Implication: ISPs have incentive to interconnect.– Does not mean: All pairs of ISPs should be connected.
• Redundant links might not reduce routing costs.
• Sunk cost is not considered.
Summary
• Ideal profit-sharing solution – the Shapley value– Efficiency, Symmetry and Balanced Contribution.
– Additivity, Strong Monotonicity, Dummy …
– Close-form solution for eyeball/content ISPs.
• ISP incentives under the Shapley value solution– Incentive to use global optimal routes.
– Incentive to interconnect.