A Novel Auction Algorithm for Fair Allocation of A Wireless Fading Channel

We develop a novel auction-based algorithm to allow users to fairly compete for a wireless fading channel. We use the all-pay auction mechanism whereby user bid for the channel, during each time-slot, based on the fade state of the channel, and the user that makes the higher bid wins use of the channel. Under the assumption that each user has a limited budget for bidding, we show the existence of a unique Nash equilibrium strategy. We show that the strategy achieves a throughput allocation for each user that is proportional to the user’s budget and establish that the aggregate throughput received by the users using the Nash equilibrium strategy is at least 3/4 of what can be obtained using an optimal centralized allocation scheme that does not take fairness into account.