Downlink resource allocation and pricing for wireless networks

This paper considers resource allocation and pricing for the downlink of a wireless network. We describe a model that applies to either a time-slotted system (e.g. Qualcomm´s HDR proposal) or a CDMA system; the main feature of this model is that the channel quality varies across the users. We study using a pricing scheme for the allocation of radio resources. We show that to maximize revenue in such a system, the base station should allocate resources in a discriminatory manner, where different users are charged different prices based in part on their channel quality. However, optimally allocating resources in this way is shown to require knowledge about each user´s utility function. We consider a suboptimal scheme which does not require knowledge of the users´ utility functions, and show that this scheme is asymptotically optimal, in the limit of large demand. Moreover, such a scheme is shown to maximize social welfare. We also consider a heuristic scheme for the case of small demand, which does not require perfect knowledge about the users´ utility functions. We provide numerical results that illustrate the performance of this heuristic.