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The optimal contract design for cloud computing service with resource guarantee under the consideration of resource redundancy and network externality is studied in this research. A model in which a service provider determines joint pricing and resource allocation decisions is constructed by proposing two types of contracts with different service-level agreements (SLAs). The SLA of each contract describes the price and associated penalty if the provider cannot provide the resource requested bydoi:10.1057/s41274-016-0141-z fatcat:2mgicjptmjav3ldi5nab6g66te