Implications of Dynamic Spectrum Access on the Efficiency of Primary Wireless Market

In this paper, we develop a microscopic, agent-based simulation tool, called SIGMA-SPECTRUM to study the dynamics of the primary wireless spectrum market. A detailed, synthetic demand model, is used to produce disaggregated spectrum demand profiles that vary spatially and temporally for each individual in the population. We implement a truthful and efficient auction mechanism, proposed by Ausubel, that results in more efficient allocations than the current auction mechanisms used by the FCC. This research analyzes the effect of recent advances in cognitive radio technology, the DSA (Dynamic Spectrum Access) and the possibility of active trading in the secondary market, on the allocation outcomes in the primary market. Provision of active trading in the secondary market invites speculators and sometimes encourages collusive behavior among bidders, which can significantly alter the primary market outcomes in terms of winners and their allocations.