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Wireless Communications and Mobile Computing
Volume 2018, Article ID 1012041, 12 pages
https://doi.org/10.1155/2018/1012041
Research Article

Dynamic Price Competition between a Macrocell Operator and a Small Cell Operator: A Differential Game Model

ITACA, Universitat Politècnica de València, Camino de Vera s/n, 46022 Valencia, Spain

Correspondence should be addressed to Julián Romero; se.vpu.acati@ahcoruj

Received 29 December 2017; Accepted 15 April 2018; Published 15 May 2018

Academic Editor: Bernard Cousin

Copyright © 2018 Julián Romero et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

An economic model was analyzed where a new supplier implements the technology of the small cells and positions itself as an incumbent service provider. This provider performs a dynamic reuse of resources to compete with the macrocells service provider. The model was analyzed using game theory as a two-stage game. In the first stage, the service providers play a Stackelberg differential game where the price is the control variable, the existing provider is the leader, and the new supplier is the follower. In the second stage, users’ behavior is modeled using an evolutionary game that allows predicting the population changes with variable conditions. This paper contributes to the implementation of new technologies in the market of mobile communications through analysis of competition between the new small cell service providers (SSPs) and the existing service providers along with the users’ behavior of mobile communications. The result shows that users get a better service, SSP profits are guaranteed, and SSP entry improves users’ welfare and social welfare.