Secondary Spectrum Auctions for Markets With Communication Constraints

Wireless spectrum sharing techniques have become very important due to the increasing demand for spectrum. Hence, there is growing interest in using real-time auctions for economically incentivizing users to share their excess spectrum. However, the communication and control requirements of real-time secondary spectrum auctions would be overwhelming for wireless networks. Prior literature has not considered critical communication constraints such as bid price quantization and error prone bid revelation. These schemes also have high overheads which cannot be accommodated in wireless standards. We propose auction schemes where a central clearing authority auctions spectrum to bidders, while explicitly accounting for these communication constraints. Our techniques are related to the posterior matching scheme, which is used in systems with channel output feedback. We consider several scenarios where the clearing authority's objective is to award spectrum to bidders who value spectrum the most. We prove that this objective is asymptotically attained by our scheme when bidders are nonstrategic with constant bids. We propose separate schemes to make strategic users reveal their private values truthfully, auction multiple subchannels among strategic users, and track slowly time-varying bid prices. We provide extensive simulation results to illustrate the performance and effectiveness of our algorithms.