Pricing model for the secondary market architecture in cognitive radio networks

The traditional rigid spectrum allocation approach, which assigns fixed portions of spectrum to specific license holders for long term basis, is unable to manage the spectrum efficiently any longer. In order to fully utilize scarce spectrum resources in wireless networks, dynamic spectrum allocation becomes a promising approach. It is the cognitive radio technology that enables a dynamic spectrum access network sharing a wide range of available spectrum in an opportunistic manner. In this paper, we propose a pricing model for short-term sub-lease of unutilized spectrum bands to different service providers. We built our model on a competitive spectrum exchange marketplace. We obtain the equilibrium spectrum prices via a game theoretical pricing model. The Nash equilibrium point tells the spectrum holders the ideal price and quality of service level values where profit is maximized at the highest level of customer satisfaction. As the game model suggest, the numerical results show that the price and QoS level values of the network providers depend on the price and QoS of their own bands as well as the prices and QoS levels of their competitors' bands.