A novel mobile data plan design from the perspective of data period

In the conventional mobile data plans, the unused data will be cleared at the end of every period (e.g., month). To take advantage of customers' heterogeneous demands across different periods and to provide more flexible data service, some mobile data service providers (SP) have offered data plans with different lengths of period. In this paper, we consider the data plan design problem for a single SP, who provides data plans with different lengths of period to consumers with different characteristics of data demands. We propose a contract-theoretic approach, where the SP offers a period-price contract consisting of a set of period-price combinations. Each period-price combination is designed for a specific type of consumers with a specific data demand distribution. We systematically analyze the incentive compatibility (IC) constraint and individual rationality (IR) constraint which ensure each consumer to purchase the data plan with the period-price combination intended for his type. Based on the IC and IR analysis, we further derive the optimal contract that maximizes the SP's expected revenue. Our numerical results show that our proposed optimal contract can achieve 94% of the maximum social surplus, and can increase the SP's revenue by 25% comparing with the conventional monthly-period data plan.