Spectrum Sharing through Contracts

Development of dynamic spectrum access and allo- cation techniques recently [6] have made feasible the vision of cognitive radio systems. However, a fundamental question arises: Why would licensed primary users of a spectrum band allow secondary users to share the band and degrade performance for them? This incentive issue has been sought to be addressed by designing incentive-compatible auction mechanisms [4]. This, however, does not solve the problem. It is not clear who acts as the auctioneer. If the primary himself does, why would the secondary trust the primary to not manipulate the auction. We propose that a more appropriate mechanism to solve this incentive problem is a contractual mechanism. In this paper, we consider a simple setting: A single primary transmitter-receiver pair and a single secondary transmitter-receiver pair with a Gaussian interference channel between them. We consider the setting of complete information when channel attenuation coefficients and noise levels at the receivers are common knowledge. We consider that receivers cooperate to do successive-interference cancellation. Unlike the results of [7] for unlicensed bands, we show that it is possible to achieve socially optimal rate allocations with contracts in licensed bands.