Sponsored Data: Smarter Data Pricing in the Age of Data Cap

摘要

As the amount of online content explodes, consumers have to make a choice: either cut down their mobile data consumption or pay high overage fees. We investigate a recent phenomenon whereby network service providers are encouraging content providers to sponsor data for consumers. We analyze this phenomenon using game theory within a setting of one monopoly mobile network operator (MNO) and two competing content providers (CPs). Consumers are heterogeneous in both data usage and in their preference for the CPs. We find that the MNO's optimal profit decreases as the consumers' data cap becomes larger, and the optimal pricing scheme is a two-part tariff without any data caps.