Market-based power allocation for a differentially priced FDMA system

In this paper, we study the problem of differential pricing and QoS assignment by a broadband data provider. In our model, the broadband data provider decides on the power allocated to an end-user not only based on parameters of the transmission medium, but also based on the price the user is willing to pay. In addition, end-users bid the price that they are willing to pay to the Base Station (BS) based on their channel condition, the throughput they require, and their belief about other users´ parameters. We will characterize the optimum power allocation by the BS which turns out to be a modification of the solution to the well-known water-filling problem. We also characterize the optimum bidding strategy of end-users using the belief of each user about the cell condition.