Dynamic Pricing Coalitional Game for Cognitive Radio Networks

We consider a hierarchical game theoretic model for cognitive radio (CR) networks in which primary users (PU) set the price to charge secondary users (SU) for accessing the licensed spectrum and SUs optimize their transmit powers according to the price imposed by PUs. Pricing strategies can be tailored to steer SUs to a Stackelberg equilibrium. We establish a coalition formation game framework to study the possible cooperation among PUs. In our framework, the PUs who can detect the same SUs form a coalition to select the pricing function as long as each member of the coalition is allocated a fair share of the payoff. We show that allowing all PUs to cooperatively decide the price for every SU is generally not the optimal solution. We then propose a distributed algorithm that allows PUs to dynamically approach a unique and stable partition of the grand coalition, as well as a Stackelberg equilibrium point of the hierarchical game.