An Optimization Algorithm for the Sale of Overage Data in Hong Kong’s Mobile Data Exchange Market

Abstract

Internet service providers are offering shared data plans where multiple users may purchase and share a single pool of data. In the Chinese economy, users have the ability to sell unused data on the Hong Kong Exchange Market, called “2cm”, currently maintained by AT&T internet services. We propose a software-defined network for modeling this wireless data exchange market; a fully connected, pure “point of sale” market. A game-theoretical analysis identifies and defines rules for a progressive second price (PSP) auction, which adheres to the underlying market structure. We allow for a single degree of statistical freedom—the reserve price—and show that data exchange markets allow for greater flexibility in acquisition decision-making and mechanism design with an emphasis on optimization of software-defined networks. We have designed a framework to optimize this strategy space using the inherent elasticity of supply and demand. Using a game theoretic analysis, we derive a buyer-response strategy for wireless users based on second price market dynamics and prove the existence of a balanced pricing scheme. We examine shifts in the market price function and prove that the desired properties for optimization to a Nash equilibrium hold.