Market Mechanisms for Dynamic Spectrum Access (DSA)

This paper applies fundamental market-based approaches to the problem of (wireless) spectrum sharing between a licensed primary user (PU) and an unlicensed secondary user (SU). We consider both orthogonal and non-orthogonal modes of dynamic spectrum access (DSA), and explore rates and profits at market equilibrium. Our analytical formulation is distinct from prior art: we assume that 1) PU increases its transmit power (within bounds) to avoid any rate loss from DSA and 2) the spectrum owner provides compensation to exactly offset PU's increased power costs, leaving PU's overall economic well-being unaffected by DSA. This allows quantification of the marginal costs for various DSA schemes for fair comparison and insights into corresponding market behavior. Our analysis suggests that non-orthogonal DSA is more profitable when 1) spectrum owners face low competition; 2) SU is very sensitive to power consumption but not very sensitive to data rates (low or moderate rate applications); and 3) channel conditions imply low mutual interference between PU and SU; otherwise, orthogonal DSA is more profitable. Market competition has a very large impact on profits and rates under non-orthogonal DSA but not for orthogonal DSA. Finally, we explore a novel hybrid approach where some portion of the licensed bandwidth is reserved for PU's exclusive use and non-orthogonal DSA is permitted over the rest, we determine bounds on how much bandwidth should be reserved for PU in such cases.