Economic Analysis of Edge Caching Enabled Mobile Internet Ecosystem

Mobile edge caching is promising to improve content delivery and alleviate backbone burden by caching contents at the network edges. The commercial deployment relies on a comprehensive understanding of the economic interactions involved. This paper studies the edge caching enabled Internet ecosystem including a Content Provider (CP), a Global ISP (G-ISP) providing backbone services, a Local ISP (L-ISP) providing access services, and End-Users (EUs). The CP serves EUs via Internet servers or L-ISP's edge cache. We formulate their multi-tiered interactions as a three-stage dynamic game. In Stage I, CP determines edge cache storage to purchase from L-ISP and cache access fee to charge EUs. In Stage II, G-ISP and L-ISP determine backbone and access prices. In Stage III, EUs decide whether to choose edge cache services, considering cache hit probability, cache access fee, and backbone access prices. We analyze the subgame perfect equilibrium by elaborately designing five cases of EUs' choices, five regions of ISPs' pricing, and three patterns of CP's caching, under cooperative and competitive ISP pricing scenarios. Our analysis demonstrates that adopting edge caching leads to win-win outcomes for all parties involved. Furthermore, we find that competitive pricing is more advantageous for CP's profit when cache costs are low, while cooperative pricing is more beneficial when cache costs are high.