EBay In The Sky: Strategy-proof Wireless Spectrum Auctions

Abstract

Market-driven dynamic spectrum auctions can drastically improve the spectrum availability for wireless networks struggling to obtain additional spectrum. However, they face significant challenges due to the fear of market manipulation. A truthful or strategy-proof spectrum auction eliminates the fear by enforcing players to bid their true valuations of the spectrum. Hence bidders can avoid the expensive overhead of strategizing over others and the auctioneer can maximize its revenue by assigning spectrum to bidders who value it the most. Conventional truthful designs, however, either fail or become computationally intractable when applied to spectrum auctions. In this paper, we propose VERITAS, a truthful and computationally-efficient spectrum auction to support an eBay-like dynamic spectrum market. VERITAS makes an important contribution of maintaining truthfulness while maximizing spectrum utilization. We show analytically that VERITAS is truthful, efficient, and has a polynomial complexity of <i>O</i>(<i>n</i>³<i>k</i>) when n bidders compete for <i>k</i> spectrum bands. Simulation results show that VERITAS outperforms the extensions of conventional truthful designs by up to 200% in spectrum utilization. Finally, VERITAS supports diverse bidding formats and enables the auctioneer to reconfigure allocations for multiple market objectives.