Internet Service Providers’ Pricing Strategies for Loyal Customers

  • Trinh Anh Tuan


In this paper, we investigate the impacts of user behaviour – user loyalty in particular – on pricing strategies of Internet Service Providers (ISPs) for a profitable yet sustainable Internet access marketplace. First, we propose a realistic user loyalty model, the price difference dependent loyalty model, which is based on empirical evidences from ISPs in different countries in the world. Next, we apply the loyalty model in gametheoretical analyses where optimal Internet access pricing strategies are expressed. Finally, we present the impacts of user loyalty on the prices and profits of ISPs in different scenarios based on simulation results
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