Quality Sensitive Price Competition in Spectrum Oligopoly

Abstract: We investigate a spectrum oligopoly where primary users allow secondary access in lieu of financial remuneration. Transmission qualities of the licensed bands fluctuate randomly. Each primary needs to select the price of its channel with the knowledge of its own channel state but not that of its competitors. Secondaries choose among the channels available on sale based on their states and prices. We formulate the price selection as a non-cooperative game and prove that a symmetric Nash equilibrium (NE) strategy profile exists uniquely. We explicitly compute this strategy profile and analytically and numerically evaluate its efficiency. Our structural results provide certain key insights about the unique symmetric NE.