Co-Investment Under Uncertainty: Coalitional Game Formulation and Application to Edge Computing

We focus on the deployment of large scale Edge Computing (EC) infrastructure, which requires substantial capital and operational costs. The Infrastructure Providers (InPs) are reluctant to make these investments, as the revenues from edge services, e.g., augmented reality, may be mainly captured by the respective Service Providers (SPs), and not the InPs. This is the main reason for the limited deployment of EC. We tackle this economic aspect by proposing a co-investment strategy, in which all players, i.e., one InP and multiple SPs, form a coalition to deploy an optimal amount of resources, dynamically allocate them over an investment period, and fairly share costs and revenues. The major challenge is to ensure that the coalition is stable, i.e., the co-investment is profitable for all players under uncertainty of revenues, which comes from the uncertainty of future user demand. We address this challenge with a novel stochastic coalitional game formulation, which allows us to analytically compute a lower bound on the probability that the grand coalition is stable. Numerical results show a large value for the lower bound, even with high levels of uncertainty, provided that the number of SPs is relatively small, their loads are comparable, and the investment period is long enough.