Network virtualization with dynamic resource pooling and trading mechanism

Network virtualization is a promising technology for the next generation network, which is required to offer a more dynamic and flexible network infrastructure. Virtual network embedding plays a vital role in the resource allocation of network virtualization. Current virtual network embedding allocates resources in an exclusive and excessive manner. For example, the whole bandwidth amount of the virtual network's peak traffic demand is allocated to the virtual network with full availability. However, such excessive resource allocation may result in resource under-utilization, leading to high user cost and low carrier revenue. To address this problem, we propose a new dynamic resource pooling and trading mechanism. The proposed mechanism is formulated as a Stackelberg game, using bandwidth as an example of the resources. We compare the user cost and the carrier revenue under the proposed mechanism against those under the exclusive resource allocation schemes. Our results show that under certain conditions, the "win-win" situation, in which the user saves cost and the carrier increases its revenue, exists and the optimal Subgame Perfect Equilibrium (SPE) point can be found.