A new Walrasian mechanism design for optimal pricing and resource allocation in heterogeneous wireless access networks

In this paper, we address joint spectrum allocation and pricing problem in heterogeneous wireless access networks. In contrast to traditional static spectrum allocation approach, we model the spectrum as a market commodity, dynamically arbitrated by a regulatory agent with the aim of maximizing the social welfare. This is of particular importance with the dominance of wireless technologies in access networks and the sharp increase in the number of overlapping wireless technologies and networks. We designed a novel Walrasian mechanism called economic resource allocation and pricing based on a three-stage game model capable of considering multiple networks and clients with individual attributes and preferences. In the first stage, competition among networks for spectrum allocation is handled where the regulatory evaluates the social welfare and takes corrective action. In the bottom two stages, the complex interactions between clients and networks result in bitrate allocations and service pricings. The equilibrium condition is analyzed using the Walrasian market model which is argued to be the Nash equilibrium of the proposed game. The system behavior is analyzed through extensive simulations. The results confirm the effectiveness of the proposed mechanisms in moving the system towards maximal social welfare.