Spectrum Allocation in Two-Tier Heterogeneous Network: A Bilateral Negotiation Framework

A two-tier heterogeneous network, comprised of a macrocell underlaid with flexible and uncoordinated femtocell network, provides an economically viable way to improve indoor coverage, users´ QoS and the capacity of the whole cellular network. However, mutual interference between macrocell and femtocell limits capacity and leads to the problem of coexistence. This paper proposes a game theoretical and decentralized spectrum negotiation framework to solve the above-mentioned problem. Macrocell and femtocell users have to reach a mutual satisfactory agreement on the partition of spectrum by making alternating offers to each other. By modeling the bargaining process as multi-stage dynamic game, we are able to obtain the equilibrium outcome. Theoretical and numerical analysis on negotiation results show that macrocell and femtocell can achieve a fair, efficient, and incentive compatible spectrum allocation via the proposed bilateral negotiation interactions.