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Issue No.11 - November (2011 vol.10)
pp: 1590-1604
Lingjie Duan , The Chinese University of Hong Kong, Hong Kong
Biying Shou , City University of Hong Kong, Hong Kong
ABSTRACT
This paper studies the optimal investment and pricing decisions of a cognitive mobile virtual network operator (C-MVNO) under spectrum supply uncertainty. Compared with a traditional MVNO who often leases spectrum via long-term contracts, a C-MVNO can acquire spectrum dynamically in short-term by both sensing the empty “spectrum holes” of licensed bands and dynamically leasing from the spectrum owner. As a result, a C-MVNO can make flexible investment and pricing decisions to match demands of the secondary unlicensed users. Compared to dynamic spectrum leasing, spectrum sensing is typically cheaper, but the obtained useful spectrum amount is random due to primary licensed users' stochastic traffic. The C-MVNO needs to determine the optimal amounts of spectrum sensing and leasing by evaluating the trade-off between cost and uncertainty. The C-MVNO also needs to determine the optimal price to sell the spectrum to the secondary unlicensed users, taking into account wireless heterogeneity of users such as different maximum transmission power levels and channel gains. We model and analyze the interactions between the C-MVNO and secondary unlicensed users as a Stackelberg game. We show several interesting properties of the network equilibrium, including threshold structures of the optimal investment and pricing decisions, the independence of the optimal price on users' wireless characteristics, and guaranteed fair and predictable QoS among users. We prove that these properties hold for general SNR regime and general continuous distributions of sensing uncertainty. We show that spectrum sensing can significantly improve the C-MVNO's expected profit and users' payoffs.
INDEX TERMS
Cognitive radio, spectrum trading, spectrum sensing, dynamic spectrum leasing, spectrum pricing, Stackelberg game, Subgame Perfect equilibrium.
CITATION
Lingjie Duan, Biying Shou, "Investment and Pricing with Spectrum Uncertainty: A Cognitive Operator's Perspective", IEEE Transactions on Mobile Computing, vol.10, no. 11, pp. 1590-1604, November 2011, doi:10.1109/TMC.2011.78
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