Demand-Responsive Pricing in Open Wireless Access Markets

Radio resource management (RRM) across operator boundaries is emerging as a salient feature for wireless systems beyond 3G. Until recently, research has been confined to solutions where cooperating networks enter explicit sharing agreements that define how responsibilities and revenues should be divided. An alternative would be to share the infrastructure implicitly by establishing an open wireless access market wherein networks not only compete for users on a long-term time-scale, but also on a much shorter time-base. This could be realized with an architecture where autonomous trade-agents, that reside in terminals and access points (APs), manage the resources through negotiations. In this paper we develop a framework for studying demand-responsive pricing in contexts where APs with overlapping coverage compete for users. Resources are partitioned through a proportional fair divisible auction and our aim is to establish if, and when, an open market for wireless access can be self-sustained. Compared to a scenario where APs cooperate, our results show that, an open access market results in better services at lower price which in the prolonging also yields more satisfied customers. As an effect demand will increase and, from the perspective of the APs, act as a counterbalance to the reduced prices. Thus, the revenue earned by the APs will be comparable to the one in which obtained through AP cooperation and monopoly (cartel) pricing. Generally speaking, the difference between the cooperative and noncooperative RRM is small when the demand is concave and increases with the convexity of demand.