Auction-Based Dynamic Spectrum Trading Market – Spectrum Allocation and Profit Sharing

We study the problem of designing a new trading market for dynamic spectrum sharing when there are multiple sellers and multiple buyers. First, we study the interaction among homogeneous buyers of spectrum as a noncooperative game and show the existence of a symmetric mixed-strategy Nash equilibrium (SMSNE). Second, we assume that the sellers employ an optimal mechanism, called the generalized Branco’s mechanism, and prove that there exists an incentive for risk neutral sellers of the spectrum to cooperate in order to maximize their expected profits at the SMSNEs of buyers’ noncooperative game. Third, we model the interaction among the sellers as a cooperative game and demonstrate that the core of the cooperative game is nonempty. This indicates that there exists a way for the sellers to share the profits in a such manner that no subset of sellers will deviate from cooperating with the remaining sellers. Finally, we propose a profit sharing scheme that can achieve any payoff vector in the nonempty core of the cooperative game while satisfying two desirable properties.