Pricing-Based Spectrum Leasing for Cognitive Networks with Channel Quality Diversity

In cognitive networks, unused spectrum should be carefully priced to maximize primary system's profit and satisfy secondary user's diverse requirements. In this paper, we investigate a pricing-based spectrum leasing framework where a primary system and multiple cognitive users involved in. In the proposed model, unused spectrum is classified into two types of channels with different spectrum quality. Secondary user chooses the channel according to its own selection preference which is relevant to the channel quality and spectrum evaluation. On the other hand, a spectrum pricing mechanism for the primary user is proposed based on the distribution characteristics of the secondary preference. We cast the optimization problem into the Hotelling game model where the pricing game is carried out with distinct product diversity. By solving the Nash equilibrium of the game model, an iterative algorithm for spectrum pricing is obtained. We further prove the existence and uniqueness of the equilibrium as well as the convergence characteristic of the iterative algorithm. Numerical results are presented to show how the settings of selection preference and spectrum pricing affect the spectrum owner's profits.