Quantized auction schemes for secondary spectrum markets

Auctions have been proposed as a way to provide economic incentives to dynamically allocate unused spectrum to users in need of it. Previously proposed auction schemes do not take into account the fact that users' power and bandwidth constraints might prevent them from transmitting their bid prices to the auctioneer with high precision, and that these transmitted bid prices must travel through a noisy channel. We propose auction schemes for secondary spectrum markets that address both these issues. In our schemes, a central clearing authority auctions spectrum to users who bid for it, while taking into account quantization of prices and noise in the channel explicitly. Our schemes are closely related to channel output feedback problems, user scheduling problems, and specifically to the technique of posterior matching. A natural objective of the clearing authority is to maximize its revenue by awarding spectrum to the highest bidder. Our simulation results show that this objective is asymptotically attained when the bids do not vary with time.