Incentive mechanism for access permission and spectrum trading in femtocell network

The concept of femtocell access points underlying existing macrocell network has recently emerged as a key technology that provides better coverage and improves wireless system capacity. Among all three access control mechanism adopted by Femtocell Access Points (FAPs), Hybrid access is regarded as the most desirable because this mechanism makes it possible to allow both femto and macro end users to access femtocell network, which significantly enhances overall network performance. In this paper, we propose an incentive mechanism for the two-tier macro-femtocell network under hybrid access control, in which FAPs expect to lease licensed spectrum from the coexisting Macrocell Service Provider (MSP) to serve their end users (FUs), in return FAPs grant the MSP a fraction of Access Permission (ACP) so that macro end users (MUs) can access FAPs to increase the Quality of Service and macrocell network capacity. We introduce the concept of contract to specify the relationship between FAPs and the MSP. We study how the MSP can obtain the optimal contract by designing different ACP-spectrum combinations (i.e., the amount of spectrum sold from the MSP to FAPs and the corresponding quantity of ACP sold from FAPs to the MSP) for different types of FAPs. Numerical results show that both MSP and FAPs can benefit from this incentive mechanism in term of their utilities.