Transit Prices Negotiation: Combined Repeated Game and Distributed Algorithmic Approach

We present both a game theoretic and a distributed algorithmic approach for the transit price negotiation problem in the interdomain routing framework. The analysis of the centralized transit price negotiation problem shows that the only one non cooperative equilibrium is when the lowest cost provider takes all the market. The perspective of the game being repeated makes cooperation possible while maintaining higher prices. We consider then the system under a realistic distributed framework and simulate its behaviour under a simple price adjustment strategy and analyse whether it matches the theoretical results.