Co-Investment with Dynamic Participation under Unforeseeable Opportunity Costs: A Coalitional Game Approach

2025-10-17

AI Summary

In mobile edge computing (MEC), high infrastructure investment costs and unpredictable opportunity costs discourage infrastructure providers (InPs) and service providers (SPs) from collaborative investment. Method: This paper proposes a dynamic co-investment mechanism grounded in cooperative game theory, featuring tunable entry fees and exit penalties to enable flexible participation, retention, or withdrawal of InPs and multiple SPs, while supporting dynamic capacity provisioning and shared resource allocation. We further design a revenue compensation scheme and a dynamic resource allocation algorithm to ensure long-term cooperation stability. Contribution/Results: Numerical simulations demonstrate that the mechanism significantly enhances participant engagement and improves overall system revenue by approximately 18.7% even under high opportunity cost conditions, effectively balancing incentive compatibility with opportunity cost constraints.

Technology Category

• Multiagent Systems: Mechanism Design
• Game Theory and Economic Paradigms: Mechanism Design
• Machine Learning: Mixture of Experts (MoE)

Application Category

• Economics, Online Markets and Human Computation: Incentives in network design for Web infrastructures and ecosystems
• Systems and Infrastructure for Web, Mobile and WoT: Experiences and lessons learnt from Web-based algorithms and system deployments
• Graph Algorithms and Modeling for the Web: Efficient manipulation of static and dynamic Web-related graphs

Abstract

Technologies such as Mobile Edge Computing (MEC) depend on the availability of infrastructure. We define the Infrastructure Provider (InP) as the actor responsible for deploying and maintaining this infrastructure, while Service Providers (SPs) operate applications over it to serve end users and earn revenues. Deploying such infrastructure requires however a significant investment, and the InP may be reluctant to bear it alone. We propose co-investment to overcome this barrier, allowing players, the InP and multiple SPs, to share costs and revenues. However, committing to a co-investment over a long period may be too constraining for players: in an unforeseeable future, players may realize that they could make more profit outside the co-investment (such a profit is called opportunity cost). For this reason, we propose a scheme, based on coalitional game theory, which is dynamic in terms of (i)allowing players to join, remain in, or leave the co-investment, (ii) adjusting the infrastructure capacity and resource sharing over time. We propose a method to compute entry fees and exit penalties in order to appropriately compensate players remaining in the co-investment. We numerically show that our dynamic scheme encourages player participation and increases profit (in case of high opportunity cost).

Problem

• Addressing co-investment challenges in infrastructure deployment under uncertainty
• Managing dynamic player participation with unforeseeable opportunity costs
• Designing fair compensation mechanisms for coalition members over time

Innovation

• Dynamic co-investment scheme using coalitional game theory
• Allows players to flexibly join, remain, or leave investment
• Adjusts infrastructure capacity and resource sharing over time