Combining Spot and Futures Markets: A Hybrid Market Approach to Dynamic Spectrum Access

Dynamic spectrum access (DSA) is a new paradigm of secondary spectrum utilization and sharing. It allows unlicensed secondary users (SUs) to exploit the under-utilized radio spectrum licensed to primary users opportunistically. Market mechanism is a widely-used promising means to regulate the consuming behaviours of users and, hence, achieve the efficient allocation and consumption of limited resources. In this paper, we propose and study a hybrid secondary spectrum market consisting of both the futures market and the spot market, in which SUs (buyers) purchase under-utilized licensed spectrum from a primary spectrum regulator (PR), either through predefined contracts via the futures market, or through spot transactions via the spot market. We focus on the optimal spectrum allocation among SUs in an exogenous hybrid market that maximizes the secondary spectrum utilization efficiency. The problem is challenging due to the stochasticity and asymmetry of network information. To solve this problem, we first derive an o?ff-line optimal allocation policy that maximizes the ex-ante expected spectrum utilization efficiency based on the stochastic distribution of network information. We then propose an on-line VCG auction that determines the real-time allocation and pricing of every spectrum based on the realized network information and the derived allocation policy. We further show that with the spatial frequency reuse, the proposed VCG auction is NP-hard; hence, it is not suitable for on-line implementation, especially in a large-scale market. To this end, we propose a heuristics approach based on an on-line VCG-like mechanism with polynomial-time complexity, and further characterize the corresponding performance loss bound analytically. We finally provide extensive numerical results to evaluate the performance of the proposed solutions.