On Pricing of Spectrum in Secondary Markets

Author

Al Daoud, Ashraf ; Alanyali, Murat ; Starobinski, David

Author_Institution

Boston Univ., Boston

fYear

2007

fDate

Jan. 29 2007-Feb. 2 2007

Firstpage

11

Lastpage

15

Abstract

Optimal price of spectrum in secondary markets is studied. We consider a primary license holder who aims to lease the right to provide service in a given subset of its coverage area. Such a transaction has two contrasting economic implications for the seller: on the one hand the seller obtains a revenue due to the exercised price of the region. On the other hand, the seller incurs a cost due to (i) reduced spatial coverage of its network and (ii) possible interference from the leased region into the retained portion of its network. We formulate an optimization problem with the objective of profit maximization, and characterize its solutions based on a reduced load approximation. The form of optimal price suggests charging each admitted call in proportion to the attendant revenue loss due to the generated interference.

Keywords

approximation theory; cellular radio; code division multiple access; economics; optimisation; pricing; radio spectrum management; CDMA; cellular wireless spectrum; coverage area; economic; interference; network spatial coverage; optimization problem; primary license holder; profit maximization; reduced load approximation; secondary markets; spectrum optimal pricing; Communication networks; Costs; Interference; Land mobile radio cellular systems; Licenses; Microeconomics; Permission; Pricing; Telephony; Wireless communication;

fLanguage

English

Publisher

ieee

Conference_Titel

Information Theory and Applications Workshop, 2007

Conference_Location

La Jolla, CA

Print_ISBN

978-0-615-15314-8

Type

conf

DOI

10.1109/ITA.2007.4357554

Filename

4357554