Multilevel Pricing Schemes in a Deregulated Wireless Network Market

Typically the cost of a product, a good or a service has many components. Those components come from different complex steps in the supply chain of the product from sourcing to distribution. This economic point of view also takes place in the determination of goods and services in wireless networks. Indeed, before transmitting customer data, a network operator has to lease some frequency range from a spectrum owner and also has to establish agreements with electricity suppliers. The goal of this paper is to compare two pricing schemes, namely a power-based and a flat rate, and give a possible explanation why flat rate pricing schemes are more common than power based pricing ones in a deregulated wireless market. We suggest a hierarchical game-theoretical model of a three level supply chain: the end users, the service provider and the spectrum owner. The end users intend to transmit data on a wireless network. The amount of traffic sent by the end users depends on the available frequency bandwidth as well as the price they have to pay for their transmission. A natural question arises for the service provider: how to design an efficient pricing scheme in order to maximize his profit. Moreover he has to take into account the lease charge he has to pay to the spectrum owner and how many frequency bandwidth to rent. The spectrum owner itself also looks for maximizing its profit and has to determine the lease price to the service provider. The equilibrium at each level of our supply chain model are established and several properties are investigated. In particular, in the case of a power-based pricing scheme, the service provider and the spectrum owner tend to share the gross provider profit. Whereas, considering the flat rate pricing scheme, if the end users are going to exploit the network intensively, then the tariffs of the suppliers (spectrum owner and service provider) explode.Comment: This is the last draft version of the paper. Revised version of the paper accepted by ValueTools 2013 can be found in Proceedings of the 7th International Conference on Performance Evaluation Methodologies and Tools (ValueTools '13), December 10-12, 2013, Turin, Ital

Quality Sensitive Price Competition in Spectrum Oligopoly

We investigate a spectrum oligopoly where primary users allow secondary access in lieu of financial remuneration. Transmission qualities of the licensed bands fluctuate randomly. Each primary needs to select the price of its channel with the knowledge of its own channel state but not that of its competitors. Secondaries choose among the channels available on sale based on their states and prices. We formulate the price selection as a non-cooperative game and prove that a symmetric Nash equilibrium (NE) strategy profile exists uniquely. We explicitly compute this strategy profile and analytically and numerically evaluate its efficiency. Our structural results provide certain key insights about the unique symmetric NE.Comment: Presented in ISIT' 2013, Istanbul Version 2 contains some modified versions of proofs of version 1. In IEEE Proceedings of International Symposium on Information Theory, 201

Combining Spot and Futures Markets: A Hybrid Market Approach to Dynamic Spectrum Access

Dynamic spectrum access is a new paradigm of secondary spectrum utilization and sharing. It allows unlicensed secondary users (SUs) to exploit opportunistically the under-utilized licensed spectrum. Market mechanism is a widely-used promising means to regulate the consuming behaviours of users and, hence, achieves the efficient allocation and consumption of limited resources. In this paper, we propose and study a hybrid secondary spectrum market consisting of both the futures market and the spot market, in which SUs (buyers) purchase under-utilized licensed spectrum from a spectrum regulator, either through predefined contracts via the futures market, or through spot transactions via the spot market. We focus on the optimal spectrum allocation among SUs in an exogenous hybrid market that maximizes the secondary spectrum utilization efficiency. The problem is challenging due to the stochasticity and asymmetry of network information. To solve this problem, we first derive an off-line optimal allocation policy that maximizes the ex-ante expected spectrum utilization efficiency based on the stochastic distribution of network information. We then propose an on-line VickreyCClarkeCGroves (VCG) auction that determines the real-time allocation and pricing of every spectrum based on the realized network information and the pre-derived off-line policy. We further show that with the spatial frequency reuse, the proposed VCG auction is NP-hard; hence, it is not suitable for on-line implementation, especially in a large-scale market. To this end, we propose a heuristics approach based on an on-line VCG-like mechanism with polynomial-time complexity, and further characterize the corresponding performance loss bound analytically. We finally provide extensive numerical results to evaluate the performance of the proposed solutions.Comment: This manuscript is the complete technical report for the journal version published in INFORMS Operations Researc

ECONOMIC APPROACHES AND MARKET STRUCTURES FOR TEMPORAL-SPATIAL SPECTRUM SHARING

In wireless communication systems, economic approaches can be applied to spectrum sharing and enhance spectrum utilization. In this research, we develop a model where geographic information, including licensed areas of primary users (PUs) and locations of secondary users (SUs), plays an important role in the spectrum sharing system. We consider a multi-price policy and the pricing power of noncooperative PUs in multiple geographic areas. Meanwhile, the value assessment of a channel is price-related and the demand from the SUs is price-elastic. By applying an evolutionary procedure, we prove the existence and uniqueness of the optimal payoff for each PU selling channels without reserve. In the scenario of selling channels with reserve, we predict the channel prices for the PUs leading to the optimal supplies of the PUs and hence the optimal payoffs. To increase spectrum utilization, the scenario of spatial spectrum reuse is considered. We consider maximizing social welfare via on-demand channel allocation, which describes the overall satisfaction of the SUs when we involve the supply and demand relationship. We design a receiver-centric spectrum reuse mechanism, in which the optimal channel allocation that maximizes social welfare can be achieved by the Vickrey-Clarke-Groves (VCG) auction for maximal independent groups (MIGs). We prove that truthful bidding is the optimal strategy for the SUs, even though the SUs do not participate in the VCG auction for MIGs directly. Therefore, the MIGs are bidding truthfully and the requirement for social welfare maximization is satisfied. To further improve user satisfaction, user characteristics that enable heterogeneous channel valuations need to be considered in spatial spectrum reuse. We design a channel transaction mechanism for non-symmetric networks and maximize user satisfaction in consideration of multi-level flexible channel valuations of the SUs. Specifically, we introduce a constrained VCG auction. To facilitate the bid formation, we transform the constrained VCG auction to a step-by-step decision process. Meanwhile, the SUs in a coalition play a coalitional game with transferable utilities. We use the Shapley value to realize fair payoff distribution among the SUs in a coalition

Quality Sensitive Price Competition in Spectrum Oligopoly:Part 1

We investigate a spectrum oligopoly market where primaries lease their channels to secondaries in lieu of financial remuneration. Transmission quality of a channel evolves randomly. Each primary has to select the price it would quote without knowing the transmission qualities of its competitors' channels. Each secondary buys a channel depending on the price and the transmission quality a channel offers. We formulate the price selection problem as a non co-operative game with primaries as players. In the one-shot game, we show that there exists a unique symmetric Nash Equilibrium(NE) strategy profile and explicitly compute it. Our analysis reveals that under the NE strategy profile a primary prices its channel to render high quality channel more preferable to the secondary; this negates the popular belief that prices ought to be selected to render channels equally preferable to the secondary regardless of their qualities. We show the loss of revenue in the asymptotic limit due to the non co-operation of primaries. In the repeated version of the game, we characterize a subgame perfect NE where a primary can attain a payoff arbitrarily close to the payoff it would obtain when primaries co-operate.Comment: Accepted for publication in IEEE/ACM Transactions on Networking. 41 pages single column format.Conference version is available at arXiv:1305.335

Economics of Spectrum Allocation in Cognitive Radio Networks

Cognitive radio networks (CRNs) are emerging as a promising technology for the efficient use of radio spectrum. In these networks, there are two levels of networks on each channel, primary and secondary, and secondary users can use the channel whenever the primary is not using it. Spectrum allocation in CRNs poses several challenges not present in traditional wireless networks; the goal of this dissertation is to address some of the economic aspects thereof. Broadly, spectrum allocation in CRNs can be done in two ways- (i) one-step allocation in which the spectrum regulator simultaneously allocates spectrum to primary and secondary users in a single allocation and (ii) two-step allocation in which the spectrum regulator first allocates spectrum to primary users, who in turn, allocate unused portions on their channels to secondary users. For the two-step allocation scheme, we consider a spectrum market in which trading of bandwidth among primaries and secondaries is done. When the number of primaries and secondaries is small, we analyze price competition among the primaries using the framework of game theory and seek to find Nash equilibria. We analyze the cases both when all the players are located in a single small location and when they are spread over a large region and spatial reuse of spectrum is done. When the number of primaries and secondaries is large, we consider different types of spectrum contracts derived from raw spectrum and analyze the problem of optimal dynamic selection of a portfolio of long-term and short-term contracts to sell or buy from the points of view of primary and secondary users. For the one-step allocation scheme, we design an auction framework using which the spectrum regulator can simultaneously allocate spectrum to primary and secondary users with the objective of either maximizing its own revenue or maximizing the social welfare. We design different bidding languages, which the users can use to compactly express their bids in the auction, and polynomial-time algorithms for choosing the allocation of channels to the bidders

Applications of Repeated Games in Wireless Networks: A Survey

A repeated game is an effective tool to model interactions and conflicts for players aiming to achieve their objectives in a long-term basis. Contrary to static noncooperative games that model an interaction among players in only one period, in repeated games, interactions of players repeat for multiple periods; and thus the players become aware of other players' past behaviors and their future benefits, and will adapt their behavior accordingly. In wireless networks, conflicts among wireless nodes can lead to selfish behaviors, resulting in poor network performances and detrimental individual payoffs. In this paper, we survey the applications of repeated games in different wireless networks. The main goal is to demonstrate the use of repeated games to encourage wireless nodes to cooperate, thereby improving network performances and avoiding network disruption due to selfish behaviors. Furthermore, various problems in wireless networks and variations of repeated game models together with the corresponding solutions are discussed in this survey. Finally, we outline some open issues and future research directions.Comment: 32 pages, 15 figures, 5 tables, 168 reference

Cooperative retransmission protocols in fading channels : issues, solutions and applications

Future wireless systems are expected to extensively rely on cooperation between terminals, mimicking MIMO scenarios when terminal dimensions limit implementation of multiple antenna technology. On this line, cooperative retransmission protocols are considered as particularly promising technology due to their opportunistic and flexible exploitation of both spatial and time diversity. In this dissertation, some of the major issues that hinder the practical implementation of this technology are identified and pertaining solutions are proposed and analyzed. Potentials of cooperative and cooperative retransmission protocols for a practical implementation of dynamic spectrum access paradigm are also recognized and investigated. Detailed contributions follow. While conventionally regarded as energy efficient communications paradigms, both cooperative and retransmission concepts increase circuitry energy and may lead to energy overconsumption as in, e.g., sensor networks. In this context, advantages of cooperative retransmission protocols are reexamined in this dissertation and their limitation for short transmission ranges observed. An optimization effort is provided for extending an energy- efficient applicability of these protocols. Underlying assumption of altruistic relaying has always been a major stumbling block for implementation of cooperative technologies. In this dissertation, provision is made to alleviate this assumption and opportunistic mechanisms are designed that incentivize relaying via a spectrum leasing approach. Mechanisms are provided for both cooperative and cooperative retransmission protocols, obtaining a meaningful upsurge of spectral efficiency for all involved nodes (source-destination link and the relays). It is further recognized in this dissertation that the proposed relaying-incentivizing schemes have an additional and certainly not less important application, that is in dynamic spectrum access for property-rights cognitive-radio implementation. Provided solutions avoid commons-model cognitive-radio strict sensing requirements and regulatory and taxonomy issues of a property-rights model