Research Article
Optimal Contract Design for an Efficient Secondary Spectrum Market
@INPROCEEDINGS{10.1007/978-3-642-35582-0_14, author={Shang-Pin Sheng and Mingyan Liu}, title={Optimal Contract Design for an Efficient Secondary Spectrum Market}, proceedings={Game Theory for Networks. Third International ICST Conference, GameNets 2012, Vancouver, BC, Canada, May 24-26, 2012, Revised Selected Papers}, proceedings_a={GAMENETS}, year={2012}, month={12}, keywords={contract design incentives quality of service constraint secondary spectrum market}, doi={10.1007/978-3-642-35582-0_14} }- Shang-Pin Sheng
Mingyan Liu
Year: 2012
Optimal Contract Design for an Efficient Secondary Spectrum Market
GAMENETS
Springer
DOI: 10.1007/978-3-642-35582-0_14
Abstract
In this paper we formulate a contract design problem where a primary license holder wishes to profit from its excess spectrum capacity by selling it to potential secondary users/buyers, but needs to determine how to optimally price it to maximize its profit, knowing that this excess capacity is stochastic in nature and cannot provide deterministic service guarantees to a buyer. We address this problem by adopting as a reference a traditional spectrum market where the buyer can purchase exclusive access with fixed/deterministic guarantees. We consider two cases; in one the seller has full information on the buyer, including its service requirement and quality constraint, and in the other the seller only knows possible types and their distribution. In the first case we fully characterize the nature of the optimal contract design. In the second case, we find the optimal contract design when there are two possible types and determine a design procedure and show that it is optimal when the nature of the stochastic channel is common to all possible types.