Game Theory in Net Neutrality
Net neutrality has been a topic of controversy for a while now. In light of internet slowdown day on September 10, 2014, it seems fitting to explore the topic. Tim Worstall, in Internet Slowdown Day: The Game Theory of Net Neutrality, tried to explain why there is a lot of noise about this topic even though the best solution is to abandon net neutrality. On the other hand, a research featured on Science Daily has shown that net neutrality undoubtedly helps content providers without compromising the benefits of the internet service providers. It is interesting that both these articles base their claims on game theory, yet they come up with different outcomes.
The internet is simply a highway where packets are sent through, much like trucks. Net neutrality would mean that all the packages are treated the same. Essentially, internet service providers would not be able to charge companies extra for using a fast lane. If the internet was the same way as the highway system we would see companies like Netflix having to pay higher rates to get on faster lanes for streaming content. Worstall argues that if we have a scarce resource such as bandwidth, then it needs to be rationed by price. Even if we do not consider bandwidth as a scarcity, then by dropping net neutrality there will not be any extra charges because there is no shortage of resources.
The arguments made in both the articles are based on game theory – trying to make the best decisions based on how the opponent might act. The difference in these two cases though is that they consider different factors for the payoffs. Worstall’s argument seems to be based on monetary benefits. He looks at how both internet service providers (ISPs) and content providers can leverage their resources to make the best decision. If net neutrality was abandoned, the ISPs would have the advantage over companies like Netflix or Hulu who require fast internet connections. ISPs could pull in more profit without net neutrality while streaming content providers would benefit from net neutrality. The featured research on Science Daily, considers both the monetary and the social benefits in each of the situations. Although both articles apply game theory we see that the choice of payoffs alter the outcome so there might not necessarily be a dominant strategy to this problem. The outcome will depend on what we consider as the payoffs. The research featured in Science Daily seems to give a more complete picture of the situation yet if we changed the payoffs to have more weight for the monetary benefits the outcome might change. May be then the best strategy would be to abandon net neutrality.
http://www.sciencedaily.com/releases/2014/04/140416090527.htm