Optimal dynamic contract for spectrum reservation in mission-critical UNB-IoT systems

Spectrum reservation is emerging as one of the potential solutions to cater for the communication needs of massive number of wireless Internet of Things (IoT) devices with reliability constraints particularly in mission-critical scenarios. In most mission-critical systems, the true utility of a reservation may not be completely known ahead of time as the unforseen events might not be completely predictable. In this paper, we present a dynamic contract approach where an advance payment is made at the time of reservation based on partial information about spectrum reservation utility. Once the complete information is obtained, a rebate on the payment is made if the reservation is released. In this paper, we present a contract theoretic approach to design an incentivized mechanism that coerces the applications to reveal their true application type resulting in greater profitability of the IoT network operator. The operator offers a menu of contracts with advanced payments and rebate to the IoT applications without having knowledge about the types of applications. The decision of the applications in selecting a contract leads to a revelation of their true type to the operator which allows it to generate higher profits than a traditional spectrum auction mechanism. Under some assumptions on distribution of the utility of the applications, closed form solutions for the optimal dynamic spectrum reservation contract are provided and the sensitivity against system parameters is analyzed.