A Novel Mobile Data Contract Design with Time Flexibility
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In conventional mobile data plans, the unused data will be cleared at the end of each period (e.g., month). To take advantage of consumers, heterogeneous demands across different periods and to provide more time flexibility, some mobile data service providers (SP) have offered data plans with different lengths of period. In this paper, we consider the data plan design problem for a single SP, who provides data plans with different lengths of period to consumers with different characteristics of data demands. We propose a contract-theoretic approach, where the SP offers a period-price contract consisting of a set of period-price combinations. In discrete-consumer-type model, each period-price combination is designed for a specific type of consumers. In continuous-consumer-type model, the consumers are divided into limited number of groups, and each group is assigned with a period-price combination. We systematically analyze the incentive compatibility (IC) constraint and individual rationality (IR) constraint, which ensure each consumer to purchase the data plan with the period-price combination intended for his type. We further derive the optimal contract that maximizes the SP's expected profit. Our numerical results show that our proposed optimal contract can increase the SP's profit over 35 monthly-period data plan.
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