Multi-stage non-cooperative game for pricing and connection admission control inwireless local area networks

This paper focuses on learning the economic behaviour of the access point (AP) and users in wireless local area networks (WLANs), and using a game theoretic approach to analyze the interactions among them. Recent studies have shown that the AP would adopt a simple, yet optimal, fixed rate pricing strategy when the AP has an unlimited uplink bandwidth to the Internet and the channel capacity of WLAN is unlimited. However, the fixed rate strategy fails to be optimal if a more realistic model with limited capacity is considered. A substitute pricing scheme for access service provisioning is hence proposed. In particular, the AP first estimates the probable utility degradation of existing users consequent upon the admission of an incoming user. Second, the AP decides: (i) whether the incoming user should be accepted; and (ii) the price to be announced in order to try to maximize the overall revenue. The condition, under which the proposed scheme results in a perfect Bayesian equilibrium (PBE), is investigated.