Resource-Aware Dynamic Spectrum Pricing for

Cognitive Radio Networks

Suchul Lee , Hwanseok Choi and Chong-Kwon Kim
Dept.

of Computer Science and Seoul National University, Seoul, Koera 151-744

Email: {sclee, hschoi}@popeye.snu.ac.kr and ckim@snu.ac.kr

AbstractSharing of spectrum has been identified as a key

requirement in cognitive radio networks(CRNs). We address
the problem of spectrum sharing with spectrum pricing where
the primary user wants to sell the spectrum to the secondary
users. By equilibrium pricing scheme, each of the players in the
spectrum sharing game aims to take the strategy which maximize
its own profit under sojourn-time constraint for secondary users.
In condition of spectrum sojourn-time is limited because of
primary users channel usage pattern each of spectrum providers
will choose different strategy to increase profit more. With the
Bertrand model we analyze the impacts of several secondary
users preference to spectrum product provided by primary user.
(i.e., channel quality, spectrum substitutability and sojourn-time).
We propose not only the static solution of the game but also
practical one. We propose d-DBRSC algorithm which forces the
price dynamically adjusted to the equilibrium in distributed way.
The stability of the proposed scheme in terms of convergence to
the Nash equilibrium is also studied.

I. I NTRODUCTION
Cognitive radio technology [1] was proposed to solve the
current saturation in allocation of the spectrum and underutilization of the allocated band. Cognitive transceiver has an
ability to sense and adapt the own device parameters according
to surrounded environment.
With this agile ability of the transceiver, frequency spectrum
band can be shared among the licensed (i.e., primary) and
unlicensed (i.e., secondary) users to improve the spectrum
utilization and to originate more benefit to spectrum providers.
On considering selfish behavior of current network devices,
game-theoretic spectrum sharing criteria would be required to
maximize both primary and secondary users satisfaction.
When the allocated spectrum is not fully utilized by primary
user, it can be sold to secondary users who want to utilize
opportunistically. By selling frequency spectrum to secondary
users, primary user can gain more profit than ever.
In sharing of unutilized frequency spectrum, reasonable
criteria would be needed. An oligopoly pricing model provides
the sharing method when multiple sellers and buyers exist.
In this paper we especially model the spectrum sharing as
an oligopoly market where the primary user has in-sufficient
quantity of spectrum to sell because of primary users channel usage pattern. For the secondary users, this in-sufficient
quantity of spectrum is less attractive as secondary users want
to use the frequency band keep unutilized as long as possible.
Thus the preference for long sojourn-time must be considered.
We analyze the action of primary user under sojourn-time
constraint. With this analysis of spectrum owners strategy,

we propose a distributed algorithm which forces the spectrum

sharing reach Nash equilibrium.
The rest of this paper is organized as follows. Section II
reviews the related work. Section III describes the system
model, channel usage model, Bertrand game and corresponding assumption. Section IV provides the solution of competitive spectrum sharing. Section V presents the performance
evaluation results. In Section VI, we conclude this paper.

II. R ELATED W ORK

Recently networks researchers have studied since cognitive
radio introduced as a next generation technology for networks.
Fundamental tasks and agile characteristic of cognitive radio
devices was introduced [1].
Major issues are spectrum management which involves
spectrum sensing, sharing, decision and mobility [2]. Spectrum
sensing corresponds to subject how to explore the opportunity
when the primary users channel usage pattern is given.
Sensing issues have two categories. One is physical-layer
sensing and the other is mac-layer sensing [3]. With these
novel contributions, researchers have studied how to use the
found available spectrum band as well as possible.
Game theory is one of the techniques considering selfish
characteristic of current networks devices. Traditionally resource management has been analyzed with game theoretic
approach (e.g., admission control, rate control [4], power
control [5][6][7]) in wireless networks. Particularly cognitive
radio adaptive channel allocation scheme [8][9] was proposed
when multiple radio and multiple channel was provided.
In game theory, price is one of the fundamental and important criterion to model the behavior of networks components.
In [10], a price-based transmission rate control scheme was
proposed for wireless ad hoc networks.
Oligopoly market is one of the popular price and quantity competition model in cognitive radio network [11] [12].
Author described the behavior of the networks devices considering preference of spectrum owner and buyer according to
the channel quality, substitutability among the primary users
and QoS degradation of primary users.
However secondary users preference for the channel keep
unutilized by primary user, namely, sojourn-time was not
considered.

Fig. 1.

The alternating semi-Markov chain

III. P RELIMINARIES

game). In contrary with the demand market can be controlled

by buyers (the Cournot game).
This Bertrand game model can be applied to analyze a
behavior of spectrum provider and to propose a distributed
scheme of a primary user in cognitive radio networks. However
the demands of the market (i.e., secondary users) can be
considered as an abstraction with utility function. The sojourntime for secondary users can be considered as the quantity of
spectrum is limited. Under this constraint in competing market
primary user tries to find the equilibrium which maximizes its
own profit.
IV. P RICE C OMPETITION AND E QUILIBRIUM

A. System Model

A. An Utility Function of Secondary Users

We consider a wireless system with one primary user and

multiple secondary users. N channels have been allocated
to primary user. Primary user wants to share the unutilized
frequency spectrum with secondary users. Thanks to providing
frequency spectrum, secondary users competitively want to
utilize it. Primary user considers set of secondary users as a
market which consumes the quantity of spectrum. Each channel of primary user sells portions of the available frequency
spectrum (e.g., time slots in TDMA based wireless system)
to market at price pi (i = 0, 1, ..., N ). As the competition
occurs among the channels converged set of prices and their
corresponding quantity of spectrum can be regarded as criteria.
Secondary users preferences for spectrum are channel quality,
substitutability [12] and sojourn-time.

To model the spectrum demand from the secondary users

market, we employ a quadratic utility function [14]:

B. Channel Usage Model

Channel usage of primary user can be modeled as an ONOFF state semi-Markov chain alternating between ON (busy)
and OFF (idle) periods (Fig. 1). Assuming periodic sensing of
the channel let Tp denotes the sensing period of the secondary
users [3].
i
For channel i(i = 1, 2, ..., N ), let TOF
F a random variable
for idle time of the channel and its probability density function
i
i
(p.d.f.) is f (TOF
F )(x), x > 0 of the channel i. Similarly TON
is the random variable which denotes the busy time of the
channel. ON-OFF periods are assumed to be independent and
identically distributed (i.i.d.) and follow a certain distribution
(e.g., exponential etc).
Since there are only two possible states, the behavior of the
primary user can be analyzed with alternating renewal theory
[13].
Channels are sensed periodically and shared among the
secondary users competitively.
C. Bertrand Game Model
In economics, an oligopoly is a market in which few firms
compete each other non-cooperatively and independently their
profit to be maximized for selling product. Demand (i.e.,
quantity of product) from the buyers depends on the prices
from the competing firms. Thus we can control the competition
in market with the prices in seller of product side (the Bertrand

N
X
1 X
i qi2 + 2
qi qj
U(q) =
i qi
2
i=1
i=i
N
X

(1)

j6=i

where q is the set of demand from the secondary users to

the each channel of the primary user (i.e., q= q1 , q2 , ..., qN ).
i is a positive constant denotes the channel quality [12]. i
and are also positive constants denotes the substitutability.
The demand for the differentiated product is derived from the
solution to the program as follows:
max U(q)-pq

(2)

where p is the set of price when primary user sells the

spectrum to the secondary users (i.e., p= p1 , p2 , ..., pN ). As
the quadratic utility function is concave, the profit of each
channel would be maximized when partial derivation of the
equation (2) with qi is 0:
pi = i i qi

qj

(3)

j6=i

In Bertrand model, demand from the secondary services

depends on price, thus we can express qi as a function of
p as follows:

1
1
2
2

. p
q= .
(4)

.
.
.
..
..
..
..
..

N
N
Solving equation (4) we get:
qi = fi (p) = ai bi pi +

cij pj

(5)

j6=i

where ai , bi , cij are positive constant depending on channel

quality and substitutability.

i = pi qi = bi p2i + ai +

cij pj pi

(8)

j6=i

Fig. 2.
users

The channel usage model and available sojourn-time for secondary

B. Sojourn-time Formulation
As assuming the periodic sensing of secondary users,
available opportunity between consecutive sensing can be a
constraint in sharing of spectrum among the secondary users
(Fig. 2). Primary user uses each of channels independently and
also secondary users sensing occurs not considering primary
users usage pattern. As sensing the channel may happen at any
time since secondary users join the cognitive radio networks,
secondary users concern is how much time would remain
until the primary users return to each of channels. However
one may ask how to figure out primary users return, it can be
taken place by listen-before-talk policy of channel usage by
secondary users.
Alternating renewal theory suggests that remaining time of
certain random variable follows [13]:
Z
fx =

1 F (x)
dx
E[X]

(6)

Where x denotes the certain random variable, F (x) is

cumulative distribution function and E[X] is an expected value
of random variable. With this theorem, we can formulate
remaining time of available opportunity between two consecutive sensing for secondary users as follows:
Z

t+Tp

Li =

i
1 FTOF
(x)
F

i
E[TOF
F]

dx

(7)

where t denotes first sensing time among the consecutive

sensing.
This sojourn-time constraint is considered as a limit of the
demand for channel i. When secondary users demand exceeds
the sojourn-time constraint, namely, in-sufficient quantity of
spectrum, each channel of primary user has to change its
behavior to maximize its own profit.

The Nash equilibrium of the game is defined as a set of all

players strategies with the property that no player can increase
his payoff without changing other players strategies [15]. The
best response function is defined as the best strategy of one
player given others strategies. Especially when other players
choose Nash equilibrium strategies best response against them
is the Nash Equilibrium strategy.
Mathematically, to derive Nash equilibrium of the game we
have to solve the set of marginal profit function (i.e., partial
i (p)
= 0 for
differentiation of profit function respect to pi ): p
i
all players of the game as follows:
P
ai + j6=i cij pj
(9)
pi =
2bi
If the demands from the secondary users exceed the capacity
of the some channels (i.e., sojourn-time), then those players
have to increase the price for decreasing the demand until they
reach the capacity of themselves. Thus we can obtain the Nash
equilibrium under sojourn-time constraint by the demand (i.e.,
qi ) and the capacity (i.e., Li ) being equal as follows:
P
ai Li + j6=i cij pj
pi =
(10)
bi
D. Dynamic Bertrand Game Model
In real cognitive radio networks, a primary user may not be
able to adjust its behavior directly. Also, each channel of the
primary user under competition may not be able to observe
other channels strategies. Therefore each player has to learn
itself gradually to reach the Nash equilibrium state. This
gradual learning under incomplete information is a concept
of Bounded Rationality. This concept provides an intuition
for the distributed adjustment scheme. Let pni denote the
price offered by the channel i of primary user at iteration
n. At first we consider the situation in which the opponents
strategies of the previous iteration are observable by each other
(Impractical). The dynamic adjustment can be progressed as
follows:

C. Static Bertrand Game Model

With aforementioned components of the game, we can
formulate a Bertrand game as follows. The players in the game
are each channel of the primary user. The strategy of the player
is to set the unit price of the quantity of spectrum. The payoff
is profit of selling spectrum to secondary users. The quantity
of spectrum (i.e., demand from the secondary users) depends
on price competition (i.e., channel quality, substitutability)
and cannot exceed capacity (i.e., sojourn-time constraint). The
solution of the game is to set pure strategies to reach Nash
equilibrium. The Profit function for each channel of primary
user is given as product of price and quantity of spectrum.

pn+1
i


= max

ai +

n
j6=i cij pj

2bi

ai Li +

n
j6=i cij pj

P
bi

(11)
In more realistic environment, the assumption that the other
players strategies of previous iteration are observable may not
be relevant. Therefore, each player has to use local information
and the marginal profit from the secondary users. We propose
the deterministic dynamic adjustment with bounded rationality under sojourn-time constraint, namely, d-DBRSC, which
forces each player to reach Nash equilibrium in distributed
fashion (Fig. 3.). The keyword deterministic is derived from
the characteristic of the algorithm that whenever price and

TABLE I
T HE PARAMETER OF EVALUATION
Player
1
2
3
4
5

i
0.0573
0.0666
0.1873
0.0451
0.1014

ai
22.2967
20.6054
23.2267
31.6272
22.7177

bi
7.0261
8.3482
6.6042
9.822
7.5826

TABLE II
T HE DEMAND FROM SECONDARY USERS AT NASH E QUILIBRIUM
Player

Sojourn-time(Li )

1
2
3
4
5

14.0102
13.1646
14.4752
18.6755
14.2207

Demand under
sufficient-condition
15.245
12.7694
2.357
19.5679
7.2035

Demand under
sojourn-time
15.245
12.7694
2.357
19.5679
7.2035

V. P ERFORMANCE E VALUATION
Fig. 3.

The d-DBRSC algorithm

A. Evaluation Setup

corresponding quantity (i.e., demand) of the spectrum constitute Nash equilibrium at point of all amount of capacity is
shared, the algorithm does maintain the strategy permanently.
This characteristic of algorithm prevents from the fluctuation
phenomenon of price adaption which may be observed when
the deterministic behavior is not used.
E. Stability Analysis
Stability investigation of the dynamic adjustment is an
important task to prove the completeness of the algorithm
in terms of convergence to Nash equilibrium. We analyze
stability of impractical adjustment and d-DBRSC algorithm
with eigenvalues of the Jacobian matrix of the self-mapping
function in (11) and Fig. 3.
By definition, self-mapping function is stable if and only
if eigenvalues of the Jacobian matrix (denoted by i ) are all
inside unit circle in the Euclidian hyper space (i.e., |i | < 1).
From the definition, Jacobian matrix of this game is given as
follows:

J=

pn+1
1
pn
1
n+1
p2
pn
1

pn+1
1
pn
2
pn+1
2
pn
2

pn+1
N
pn
1

pn+1
N
pn
2

..
.

..
.

..
.

pn+1
1
pn
N
pn+1
2
pn
N

..
.

pn+1
N
pn
N

(12)

The analysis of the Jacobian matrix eigenvalues shows

unconditional convergence to Nash equilibrium in case of impractical adjustment. Otherwise the property of the d-DBRSC
algorithms convergence to Nash equilibrium depends on the
learning rate of the adjustment (i.e., i ) and the sojourn-time
constraint (i.e., Li ).

We consider a cognitive radio networks with one primary

user which has five allocated channels and secondary users.
We assume that primary users channel usage pattern follows
exponential distribution (i.e., expx ). Note that it could be
any distribution which can be expressed with formal definition.
The value i denotes the channel quality of primary user varies
in 520dB. The values i , represent the substitutability
characteristic, we use i = 1, = [0.5, 1). The constants
ai , bi are calculated from i , i and and we choose 0.15 as
constant value for cij . Numerical constant we used are given
in Table. I.
B. Evaluation Results
Fig. 4 shows the convergence of price adjustment by the
offered prices of the primary user under sufficient channel
capacity. Fig. 5 shows the dynamic adjustment of the dDBRSC algorithm under sojourn-time constraint.
The difference between the two figures can be explained as
this scenario. Each of the players takes an offered price for unit
quantity of the spectrum. In situation that the demand from
the secondary users which is determined by set of the offered
prices exceeds the spectrum owners (i.e., channels) limit,
those players have to increase the offered price to decrease
the demand until reaching the limit exactly (Table. II). That
is players behavior against in-sufficient capacity condition.
However Fig. 6 shows the fluctuation phenomenon of the
DBRSC algorithm which does not take the deterministic
behavior. The reason why this fluctuation phenomenon occurs
can be explained with this scenario. Assume that one player
reaches Nash equilibrium and demand from secondary users is
exactly the limitation of the player. As the opponents changing
their behavior the demand to the player which previously
attained to Nash equilibrium can be changed to lower value
than the capacity of the player. As a countermeasure of this
sequential action, player suddenly takes a different strategy.
This sudden change of players strategy is the reason for

Fig. 6.
Fig. 4.

The fluctuation pheonomenon of DBRSC

Dynamic adjustment under sufficient quantity of spectrum

C1090-0902-0006). And this work was supported by the Brain

Korea 21 Project in 2009.
R EFERENCES

Fig. 5.

The d-DBRSC algorithm under in-sufficient quantity of spectrum

fluctuation. We address it deterministically to make the player

stay at the price corresponding to demand that is exactly the
same with capacity of player.
VI. C ONCLUSIONS
We have represented a game-theoretic spectrum sharing
model to obtain Nash equilibrium. Considering sojourn-time
constraint which previously was not regarded, we provide
criteria for spectrum sharing in cognitive radio networks.
Furthermore, we propose a distributed dynamic adjustment
algorithm which forces the price adaption to Nash equilibrium
and without fluctuate. We also investigate the convergence
property of d-DBRSC. When designing cognitive radio technology, regarding current trend of the selfish networks devices
would be a key requirement. In the future, not only noncollaborative usage of opportunities provided by primary user
but also collaborative usage of spectrum should be studied.
ACKNOWLEDGMENT
This research was supported by the Ministry of Knowledge
Economy, Korea, under the Information Technology Research
Center support program supervised by the Institute of Information Technology Advancement. (grant number IITA-2009-

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