Double auction and negotiation for dynamic resource allocation with elastic demands

Resource allocation is an important topic with a wide range of applications. In many practical cases, users and resource suppliers are players in the market. As a result, much effort has been made in applying market mechanisms (such as auction and game-theoretic results) to resource allocation. The conventional approach in such studies is to consider cases where users´ resource demands are fixed. However, in practice, resource demands are often elastic, which can be related to the quality of experience (QoE) that the user receives. We consider elastic resource demands in this paper, and propose a double auction and negotiation (DAN) scheme, which includes a conventional auction stage as well as a negotiation stage, where the latter allows users to dynamically adjust their demands. The proposed DAN scheme not only allows more users to get access to some amount of resource (thereby avoiding users becoming completely disconnected), but also increases the payoff of resource suppliers, as is confirmed by simulations. We also discuss the conditions of having Nash equilibrium in the users´ resource demands and suppliers´ pricing in the negotiation stage.