An Optimal Strategy for Determining True Bidding Values in Secure Spectrum Auctions

Previous research work has shown that using spectrum auctions for dynamic spectrum sharing systems can improve spectrum utilization significantly In this paper, we propose an optimal bidding mechanism to be used by base stations (BSs) participating in a spectrum auction. We consider a secure and truthful spectrum auction with an intermediate auctioneer that auctions its underutilized spectrum bands to BSs (bidders) that belong to different wireless system providers (WSP)s and have a demand for additional resources. Truthfulness is a dominant strategy in a spectrum auction as it prevents bidders from manipulating the auction. Truthfulness can be achieved when bidders submit their true evaluation bidding values. Our goal is to design an optimal bidding mechanism that allows each BS (bidder) to calculate its true evaluation bidding price. Once the spectrum auction takes place, all bidders submit their bidding values and the auctioneer allocates the auctioned spectrum bands to the winning BSs and charges them. Each winning BS then aggregates the spectrum bands it won (i.e., temporary resources) with its permanent resources and allocates them to user equipment subscribing for mobile services. Finally we present simulation results on the performance of the proposed bidding mechanism.