Simulation of cross-border competitions of free Internet content providers

• We simulated cross-border competitions between two free Internet content providers.
• Agent-based technologies were applied to assess pay-offs of various competitive actions.
• Three Nash equilibriums are recommended as a main strategy for free Internet service provides in cross-border competitions.

This paper describes the cross-border competition between two of the largest free Internet content providers in China through the use of multi-agent technology. Case studies are conducted for both TENCENT and Qihoo 360, with their customers being simulated as agents in a model for products selection. The result of different competition strategies of the two enterprises is obtained from the virtual market. The results indicate that cross-border competition is unable to improve the market share of the two leading Internet content providers. The findings suggest that keeping one of the three proposed Nash equilibriums is the recommended strategy for companies involved in cross-border competition.