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Open Access Research Article

Budget Allocation in a Competitive Communication Spectrum Economy

Ming-Hua Lin1, Jung-Fa Tsai2* and Yinyu Ye3

Author Affiliations

1 Department of Information Technology and Management, Shih-Chien University, 70 Ta-Chih Street, Taipei 10462, Taiwan

2 Department of Business Management, National Taipei University of Technology, 1 Sec.3, Chung-Hsiao E. Road, Taipei 10608, Taiwan

3 Department of Management Science and Engineering, Stanford University, Stanford, CA 94305, USA

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EURASIP Journal on Advances in Signal Processing 2009, 2009:963717  doi:10.1155/2009/963717

Published: 4 March 2009

Abstract

This study discusses how to adjust "monetary budget" to meet each user's physical power demand, or balance all individual utilities in a competitive "spectrum market" of a communication system. In the market, multiple users share a common frequency or tone band and each of them uses the budget to purchase its own transmit power spectra (taking others as given) in maximizing its Shannon utility or pay-off function that includes the effect of interferences. A market equilibrium is a budget allocation, price spectrum, and tone power distribution that independently and simultaneously maximizes each user's utility. The equilibrium conditions of the market are formulated and analyzed, and the existence of an equilibrium is proved. Computational results and comparisons between the competitive equilibrium and Nash equilibrium solutions are also presented, which show that the competitive market equilibrium solution often provides more efficient power distribution.