Stability of Alliances between Service Providers

Three service providers in competition, try to optimize their quality of service / content level and their service access price. But, they have to deal with uncertainty on the consumers’ preferences. To reduce their uncertainty, they have the opportunity to buy information and to build alliances. We determine the Shapley value which is a fair way to allocate the grand coalition’s revenue between the service providers. Then, we identify the values of β (consumers’ sensitivity coefficient to the quality of service / contents) for which allocating the grand coalition’s revenue using the Shapley value guarantees the system stability. For other values of β, we prove that it is possible for the regulator to impose a per-period interest rate maximizing the market coverage under equal allocation rules. Keywords—Alliance, Shapley value, Stability, Repeated game, Interest rate.