Competitive Communication Spectrum Economy and Equilibrium

Consider a competitive “spectrum economy” in communication system where multiple users share a common frequency band and each of them, equipped with an endowed “monetary” budget, will “purchase” its own transmit power spectra (taking others as given) in maximizing its Shannon utility or pay-off function that includes the effects of interference and subjects to its budget constraint. A market equilibrium is a price spectra and a frequency power allocation that independently and simultaneously maximizes each user’s utility. Furthermore, under an equilibrium the market clears, meaning that the total power demand equals the power supply for every user and every frequency. We prove that such an equilibrium always exists for a discretized version of the problem, and, under a weak-interference condition or the Frequency Division Multiple Access (FMDA) policy, the equilibrium can be computed in polynomial time. This leads to a decentralized method for spectrum allocation management and optimization in achieving higher communication economy efficiency.