Multi-stage Pricing Mechanism in Duopoly Computation Markets

A new generation of computing paradigms has been proposed to facilitate people’s daily lives, and there is a lot of literature on resource allocation in these paradigms to enhance the user experience. It is also essential to investigate how to incentive users to participate in these computing paradigms to share their surplus resources. In this paper, we formulate multi-stage profit-maximizing optimization problems in duopoly computation market considering consumer value, provider reputation, Bandwagon Effect, and consumer heterogeneity from an economic perspective. In the pre-sale phase we propose the Demand Priority Pricing Algorithm (DPPA) algorithm to help providers find optimal pre-sale prices. For the formal sales phase, we design the Community Proportion Prediction Algorithm (CPPA) to predict key parameters and the Incremental Priority Pricing Algorithm (IPPA) to help providers choose pricing schemes. Finally, experimental results show that our model describes market laws well and our algorithms assist providers in finding profit-maximizing pricing schemes for fair and stable markets.