Network Investment Games with Wardrop Followers

Authors Daniel Schmand , Marc Schröder , Alexander Skopalik

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Daniel Schmand
  • Goethe University Frankfurt, Germany
Marc Schröder
  • RWTH Aachen University, Germany
Alexander Skopalik
  • University of Twente, Netherlands

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Daniel Schmand, Marc Schröder, and Alexander Skopalik. Network Investment Games with Wardrop Followers. In 46th International Colloquium on Automata, Languages, and Programming (ICALP 2019). Leibniz International Proceedings in Informatics (LIPIcs), Volume 132, pp. 151:1-151:14, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2019)


We study a two-sided network investment game consisting of two sets of players, called providers and users. The game is set in two stages. In the first stage, providers aim to maximize their profit by investing in bandwidth of cloud computing services. The investments of the providers yield a set of usable services for the users. In the second stage, each user wants to process a task and therefore selects a bundle of services so as to minimize the total processing time. We assume the total processing time to be separable over the chosen services and the processing time of each service to depend on the utilization of the service and the installed bandwidth. We provide insights on how competition between providers affects the total costs of the users and show that every game on a series-parallel graph can be reduced to an equivalent single edge game when analyzing the set of subgame perfect Nash equilibria.

Subject Classification

ACM Subject Classification
  • Theory of computation → Algorithmic game theory and mechanism design
  • Theory of computation → Network games
  • Network Investment Game
  • Wardrop Equilibrium
  • Subgame Perfect Nash Equilibrium


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