Costly Measurements to Incentivize Spectrum Sharing

Connectivity services, ranging from cellular broadband to private networks and satellite communications, are driving an unprecedented demand for spectrum. However, much of the prime spectrum is locked into existing federal and scientific allocations, which often by law cannot be relocated in exchange for monetary transfer, thus making market-based reallocation strategies infeasible. We investigate a spectrum allocation mechanism that does not require monetary transfers but instead utilizes measurements that may be costly as a way to incentivize truthful reporting. We consider a scenerio involving three agents: An incumbent scientific or federal user (SFU), a commercial user (CU), and a regulator. The incumbent derives value from its current exclusive use of a spectrum band but faces increasing disutility as soon as the CU is allowed to either share the same band or use an adjacent band, while the CU benefits from gaining access. The regulator allocates spectrum based on the incumbent’s reported disutility and the CU’s utility, with provisions to verify reports and penalize dishonesty through spectrum reallocation. Our analysis demonstrates that this mechanism incentivizes truthful reporting and ensures more efficient spectrum utilization, supported by theoretical and experimental evidence on synthetic data.