Fundamental limits on ex-post enforcement and implications for spectrum rights

The combination of emerging new communication technologies, economic growth, and current limitations on the amount of available dedicated spectrum necessitate sharing spectrum dynamically between incumbent (primary) users and opportunistic (secondary) users. This paper builds upon the seminal “spectrum jails” paradigm - a mathematical model for light-handed ex-post enforcement. Analyzing this as a Stackelberg game, we examine what kinds of rights for primaries and secondaries we can credibly enforce. While the primary cannot possibly be made to trust that secondaries will always be honest, it can trust that it will be protected from too much harmful interference and we show how the enforcer can set the ex-post enforcement parameters to do this no matter which secondary user becomes capable of using the band. Similarly, it is impossible to give a universal guarantee to all secondary users that the primary will never make false reports (“cry wolf”) against them. However, it is possible to show that “compatible” secondary users will trust that the primary user will not make false reports against them when the spectrum opportunity is sufficiently attractive for them to use.