Balancing Income and User Utility in Spectrum Allocation

To match wireless users´ soaring traffic demand, spectrum regulators are considering allocating additional spectrum to the wireless market. There are two major directions for the spectrum allocation: licensed (e.g., 4G cellular service) and unlicensed services (e.g., Super Wi-Fi service). The 4G service provides a ubiquitous coverage, has a higher spectrum efficiency, and often charges users a high service price. The Super Wi-Fi service has a limited coverage, a lower spectrum efficiency, but often charges users a low service price. The spectrum regulator now simply allocates the spectrum to maximize its income, but such an income-centric allocation does not ensure the best spectrum utilization by the users. This motivates us to design a new spectrum allocation scheme which jointly considers the spectrum regulator´s income and the users´ aggregate utility by investigating three market tiers: the spectrum regulator, 4G and Super Wi-Fi operator coalitions, and all the wireless users. We formulate it as a three-stage game and derive the unique subgame perfect equilibrium. Compared with the traditional income-centric allocation, we prove that the proposed scheme significantly improves users´ aggregate utility with a limited spectrum regulator´s income loss.