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IEEE JOURNAL ON SELECTED AREAS IN COMMUNICATIONS, VOL. 29, NO. 4, APRIL 2011

On a Truthful Mechanism for Expiring Spectrum

Sharing in Cognitive Radio Networks
Shabnam Sodagari, Alireza Attar, Member, IEEE, and Sven G. Bilen, Senior Member, IEEE

AbstractWe study how truthfulness can be enforced as a

dominant strategy when a number of secondary cognitive radios
participate in an online expiring spectrum sharing auction, held
by the primary to lease its spectrum holes. The types of secondary
cognitive radios, announced to the primary, are composed of
valuation and arrivaldeparture periods. We show how, by the
suitable choice of channel allocation and pricing schemes, the
collusion incentive among secondary cognitive radios can be
reduced. The performance of the deployed dynamic auction is
compared with that of the VickreyClarkeGroves (VCG) offline
auction as a benchmark.
Index Termscognitive radio networks, collusion, spectrum
sharing, dynamic auctions.

I. I NTRODUCTION

PECTRUM auctioning provides a convenient interaction

mechanism to facilitate the Dynamic Spectrum Access
(DSA) paradigm endorsed by spectrum regulatory bodies
around the world. The alternative (legacy) Fixed Spectrum Access (FSA) approach, in which dedicated spectrum bands are
assigned to specific service providers to operate specific Radio
Access Technologies (RAT), is now deemed unsustainable.
While the demand for wireless connectivity is growing explosively, the heterogeneous nature of wireless access (spatially
and temporally) translates into a limited duration of high traffic
load over any given Radio Access Network (RAN). Therefore,
using the FSA paradigm results in significant underutilization
of the radio spectrum, as manifested by numerous spectrum
measurements reported in the literature.
Spectrum license holders, however, are reluctant to grant
permission of their spectral resources to secondary spectrum
access, mainly due to interference considerations. As an example, the recent FCC decision to permit unlicensed secondary
access to TV white spaces [3] was challenged by broadcasting
companies. While the FCC has proposed a rather conservative
spectrum-sensing target for systems designed to operate in
TV white spaces in an attempt to address the interference
concerns, there nevertheless exists a non-zero probability of
error associated with any spectrum-sensing scheme, resulting
in imposed interference on the primary network (known as the
probability of misdetection) or inefficiency of a DSA scheme
(due to probability of false alarm).
Manuscript received 30 November 2009; revised 26 May 2010. Parts of
the contributions in this paper have appeared at IEEE DySPAN10.
S. Sodagari and S. G. Bilen are with the Department of Electrical Engineering, The Pennsylvania State University, University Park, PA, 16802 USA
(e-mail: {shabnam, sbilen}@psu.edu).
A. Attar is with the Department of Electrical and Computer Engineering,
University of British Columbia, Vancouver, BC V6T 1Z4, Canada (email:
attar@ece.ubc.ca).
Digital Object Identifier 10.1109/JSAC.2011.110416.

An alternative approach towards the realization of DSA is

to proactively involve the primary system in the process. The
primary network possesses a reliable and up-to-date knowledge of available spectral ranges, which alleviates any error
caused by the spectrum-sensing process. Therefore, the cost of
imposed interference to the primary users, when the secondary
system is in charge of sensing the spectrum, e.g., in terms of
reduced QoS, can be avoided through a proactive involvement
of the primary system in the DSA process, resulting in a
different cost due to interacting with the secondary system.
A further advantage of the primary user managing secondary
access relates to trust and security issues, whereby the license
holder can enforce its spectrum usage policy to lease holders.
Clearly, the trade-off between the aforementioned costs and
determining whether to use a reactive or proactive approach
to spectrum sharing will depend on system-specific technical
parameters as well as regulatory and economical frameworks.
In this paper, we focus on scenarios where a proactive DSA
mechanism has been chosen by the spectrum license holder.
A viable mechanism to foster this proactive approach is
based on spectrum auctions [4]. The goal of the auction is to
determine the secondary user(s) to which a specific frequency
band would be leased for a certain duration of time. In
practice, the primary network might not be the optimal choice
for running the auction process, for example, due to the lack
of technical capabilities of the primary system. However, it is
possible to envision trusted third parties that will moderate the
spectrum market by matching demand and supply in various
ways, such as the aforementioned auction mechanism [5]. As
the choice of auctioneer does not affect the performance of
our proposed solution, in the remainder of the paper we will
use the terms primary operator and auctioneer interchangeably,
without loss of generality.
While spectrum auctions have been considered in several
contributions found in the literature, no rigorous analysis of
auction strategies that are online and demonstrate collusion
resistance have been reported yet. Our main contributions in
this paper, hence, are targeted toward addressing these issues:

utilization of mechanism design to develop an online,

dynamic, as well as truthful spectrum auction; and
demonstration of a discrepancy between profitability
of collusion-resistant auctions with traditional auction
strategies, which can be considered as the cost of
robustness to collusion.

We will verify the performance of the proposed schemes both

analytically and through extensive simulation results.
The rest of the paper is organized as follows. Section II
provides a literature survey, which summarizes the state-of-

c 2011 IEEE
0733-8716/11/$25.00 

SODAGARI et al.: ON A TRUTHFUL MECHANISM FOR EXPIRING SPECTRUM SHARING IN COGNITIVE RADIO NETWORKS

the-art in this field. In Section III we will elaborate on the

structure of the proposed spectrum auctions. Further, the basic
notions and notation as necessary tools to develop the problem
formulation are introduced in this section. Section IV involves
the details of problem formulation and elucidates the solution.
Numerical results to support the effectiveness of the proposed
solutions are presented in Section V. Finally, Section VI
concludes the paper.
II. BACKGROUND
Mechanism design is a powerful tool that permits setting up
desirable structures for a game in order to direct the players to
behave in a desired manner [6]. More specifically, mechanism
design involves a group of participants who send messages
to a center the efforts of which are toward controlling the
output through setting up proper rules. The goal we are
trying to achieve through mechanism design is truthfulness
by rewarding the non-cheating secondary CRs. As explained
below, by a truthful CR we mean one willing to reveal its true
information when participating in the spectrum auction.
The channel allocation to unlicensed users or secondary
CRs can be formulated as an auction game [7], [8], and
second-price and VickreyClarkeGroves (VCG) auctions can
be applied in dynamic spectrum allocations [9] in the presence of collusion of secondary CRs against the primary.
For example, in [7] improved types of sealed-bid first- and
second-price auction mechanisms have been adapted to CR
environments based on the assumption that the number of secondary CRs and the statistics of their valuations are common
knowledge to them. Our work is more general than [7], [8]
in the sense that we are not restricting the problem to this
assumption. The authors of [10] have focused on optimizing
the second-price auction in dynamic Cognitive Radio Network
(CRN) environments. In [11], a repeated multi-bid auction has
been used for a decentralized cross-layer channel allocation
mechanism in opportunistic spectrum-sharing CRNs under
an interference temperature constraint. There, allocations in
both time and frequency domains are considered and the
secondary CRs are allowed to offer multiple bids specifying
different valuations for various channels of interest while
keeping their transmission power below some certain level
in order to avoid interference with the primary. Also, they
have analyzed maximum throughput, utility fairness, and time
fairness as the rules governing valuations. However, their
method is essentially different from ours in that they assume
that secondary CRs are truthful, whereas we make provisions
for the case in which the secondary CRs are not truthful in
declaring their types. In other word, we are aiming at enforcing
incentive compatibility that encourages the secondary CRs to
be truthful.
As opposed to traditional auctions, if a proper collusionresistant pricing strategy is devised, the multi-winner spectrum
allocation auction can also be considered to lease a single
spectral band to several secondary users simultaneously, provided that the locations of the secondary CRs are far enough
apart to avoid frequency interference [12]. To this end, loser
collusion and sublease collusion have been addressed. Loser
collusion involves the collusion of some secondary CRs that
are not able to win without untruthfully raising their bids,

857

whereas sublease collusion implies the existence of some

winning secondary CRs who further sublease their bands to
losing ones and gain extra profit. Therefore, allocation and
pricing strategies should be chosen in an optimal manner [12].
Further, in [13] the authors consider a dynamic auction
scenario where the secondary payoff and the primary channel
acquisition cost are random variables. They consider a double
auction strategy in which the nature of collusion is based on
pricing cartels. The authors adapt the reserve price mechanism
to combat the collusion. This is fundamentally different from
our scenario, where the dynamism is based on variable arrival
and departure of the bidders and the difference of their
valuation of the auctioned channel. The space of collusion
in our scenario spans arrival and departure time misreports
as well as bid price misreports that is more general than [13]
and mandates a different strategy-proof mechanism, as will be
discussed.
The authors in [14] consider a dynamic spectrum auction
that is inherently different from our scenario in two aspects.
First, the dynamic nature of [14] stems from the traffic
awareness of the scheme, whereas in our work we only
deal with the arrival and departure of bidders, irrespective
of the traffic condition. In fact, the valuation reported by
each bidder in its type in our scheme can include its traffic
load, but is abstracted in our scenario. Second, we focus
on a strategy-proof mechanism in our paper, whereas [14]
does not propose a collusion-resistant method. Further, [15]
studies a scenario somewhat similar to our case, in the sense
that they also propose a monotonic allocation strategy and
utilize a critical value pricing scheme. However, our proposed
mechanism generalizes [15] in several directions. First, our
scheme does not rely on the knowledge of distribution of
valuations of bidders as opposed to the aforementioned work.
This is a major advantage, as our approach does not restrict the
proposed strategy for the auctioneer (primary) to any specific
distribution and assumption of availability of its knowledge.
Further, our scheme incorporates the arrival and departure time
of bidders that adds an extra dimension of dynamism and
provides reusability of the auctioned channel over the time
domain when compared with [15]. Another contribution in
the literature, [16], deals with real-time dynamic auctions. Our
setup is fundamentally different from [16] due to presence of
the types of bidders that can contain arrival and departure time
of bidders besides their bid value. We have also extensively
discussed the collusion resistance of our work in all dimensions of possible misreports, different from the work of [16].
Other spectrum auction schemes in the literature include [17]
and [18]. The structure of [17] significantly differs from ours
as the authors consider a double-auction scheme in their work.
Further, only bid-valuation misreport is covered in the above
work, whereas we address also the arrival and departure time
misreports. Due to differences in the assumptions, they exploit
a different pricing scheme from our critical value pricing
strategy.
The contribution of our work lies in tackling the problem of
designing an online truthful auction and modeling a realistic
scenario of spectrum sharing in CRNs using mechanism
design tools, which in this case involves the optimal choice
of pricing and payment policies along with valuation func-

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IEEE JOURNAL ON SELECTED AREAS IN COMMUNICATIONS, VOL. 29, NO. 4, APRIL 2011

tions. The distinction of our work in comparison with other

approaches in the literature is that we are addressing a new
dynamic configuration of spectrum rental strategy.
In a static auction, the primary collects the bids from
secondary CRs once and makes the decision, whereas in our
approach we are permitting a dynamic CRN environment, in
which multiple secondary CRs are allowed to arrive over time
and participate in the auction with expiring spectral bands,
which implies renewable spectrum resources as is common in
many practical CRN circumstances.
III. S TRUCTURE OF THE S PECTRUM AUCTION
Consider an auction organized to lease a set of reusable
goods with expiry constraints, i.e., the offered stock of goods
are only available for a certain period of time. Initially,
auctioning of indivisible goods is considered, whereby the
auction result will be binary, i.e., the item is allocated to a
single winner for the whole expiry period.
The auction will run continuously with replacement goods
substituting the expired items in subsequent time intervals.
Without loss of generality, we assume a fixed expiry period
of T (s). Further, a total of m items are available for auction,
whereby at each expiry period one item will be auctioned off.
The choice of an item to auction is the private information
of auctioneer and the bidders can only know of the specific
choice of goods at the beginning of each expiry period.
Without loss of generality, we assume a different object will
be auctioned at each expiry period; therefore, the auction will
have a period of m T .
Denote the set of time slots (expiry periods) in a given
auction period by T = {T, 2 T, . . . , m T }, where
the ith element of the set represents the time interval
[(i 1) T, i T ]. Different bidders are allowed to submit
their sealed bids at the beginning of any time instant during the
auction period m T . Each bidder will submit a valuation of
the goods, along with its arrival (that is the earliest time instant
when the bidder wishes to receive the good) and departure
time instances (i.e., the latest time instant of interest to that
bidder to lease the goods). We refer to this valuation and
timing information submitted in the bidding process as the
type of the bidder. It is assumed that the type of a bidder is
private information of that bidder and is only reported to the
auctioneer once, at the time instant of arrival, i.e., ai .
This auction setting is dynamic as the arrival and departure
of bidders are random from the auctioneers perspective.
Further, there is an uncertainty with regard to the future
set of feasible auction decisions. The auction is also an
online mechanism, as the decision making process continues
throughout T .
The proposed online auction method is in complete contrast
to most existing auction strategies in the literature, where
auction schemes such as VCG are used in an offline fashion,
forming static auctions. More specifically, in offline auction
schemes, the auctioneer collects sealed bids at the beginning
of auction period, determining the unique winner for the next
m T time. Such static approaches might potentially lead to
several shortcomings. First, in cases where the bidders require
the item for a considerably shorter interval of time than the

auction period, static auctions impose an unnecessary delay

in the process of exchanging goods in the market. This is
because all other bidders need to wait until the next auction
period for a chance to obtain the auctioned goods. Further,
the inefficiency of such offline auction strategies will result in
reduced profitability of the auction process.
On the other hand, if the static auction is modified such that
it is run as m consecutive auctions, each for a fixed duration
T in order to increase the efficiency of the auction, certain
inefficiencies still will arise. This is due to the static nature
of the auction, excluding any newly arriving bidders from
joining the auction until the next auction period. Therefore,
our proposed auction mechanism can capture more accurately
the requirements of a dynamically changing environment and
can track the variation of demand for auctioned goods reliably.
It is further desired to enhance the proposed auction scheme
in terms of alleviating collusion in the bidding process.
Therefore, we need to develop a considerably more complex
collusion-resistant mechanism than traditional auctions due to
the possibility of misreporting valuation as well as arrival or
departure timing. It turns out that such robustness to collusion
can be sustained only at the price of a reduced auction
profitability, as demonstrated in the following sections.
A. Notation and Basic Definitions
In this section we introduce notation and required basic
definitions of the auction mechanism. In our notation we
primarily will follow the conventions of [19] and [20].
As mentioned at the beginning of Section III, the type of a
bidder is comprised of three elements and is denoted by i =
(ai , di , wi ). It is assumed i i , where i is the set of all
possible types for bidder i. The first two parameters, denoted
by ai and di represent the arrival and departure periods of the
bidder, respectively. Clearly, these time periods should satisfy
ai , di T .
Furthermore, wi = vi (i , k) defines a positive, real-valued
valuation (in dollars), obtained via the valuation function on a
sequence of allocation decisions k [20], [21] and the type of
the bidder. It is assumed that the valuation component wi
Wi , where Wi refers to the set of all possible valuations such
that wi R+ [19], [22].
A more complex scenario can be envisioned in which the
bidder is interested in a subset of auctioned items. This set of
desired allocations, denoted by Li , can be considered private
information of bidder i or general knowledge of the mechanism (as we assume in this paper). In such circumstances, the
valuation will still be a positive real-valued number; however,
the valuation component of the bidders type can be expressed
more accurately as wi = (ri , Li ), where ri denotes the
reward associated with the set of desired allocations Li . In
order to maintain the mathematical tractability of the proposed
solution, it is assumed that the reward ri is a single, real-valued
constant no matter which one of the allocations that are of the
interest to bidder i happens to be allocated to it. Therefore,
the valuation of goods by bidder i equals vi (i , k) = ri for
allocations in the desired allocation set and is zero otherwise.
Define the outcome of the online auction process over the
time interval [t1 , t2 ], where t1 , t2 T and t2 t1 , as the

SODAGARI et al.: ON A TRUTHFUL MECHANISM FOR EXPIRING SPECTRUM SHARING IN COGNITIVE RADIO NETWORKS

vector of decisions made over each time slot in that period,

i.e., k [t1 ,t2 ] = (k t1 , . . . , k t2 ). In our proposed mechanism, the
valuation function should satisfy


vi (i , k) = vi i , k [ai ,di ] ,
which indicates that a given bidders valuation of the leased
items will not depend on the allocation decisions outside of
its arrivaldeparture time interval.
Recall that the bidder is permitted to announce its type at the
same time instant as its arrival period, ai . We further assume
that each bidder only can submit its bid to the auctioneer once
and receives no feedback prior to reporting the type. Also, a
given bidder cannot adjust reporting its type based on other
bidders types, which will be considered as collusion. These
assumptions are crucial to realize a direct revelation mechanism [20]. Before introducing the direct revelation property in
more detail, we need to define the state of the mechanism as
follows.
Definition 1: In expiry period t T , the state of the
auction (mechanism) is a variable containing the complete
set of information on the allocation of goods up to that time
instant. The state is denoted by ht Ht , where Ht is the set
of possible states in that period. If the allocation decision
 ist

influenced by a stochastic event , where =

tT

denotes
 the accessible information on in all periods t, then
ht = 1 , . . . , t ; 1 , . . . , t ; k 1 , . . . , k t1 [19].
Definition 2: A direct revelation online mechanism is represented by two elements, namely a decision policy, denoted by
tT
tT
= { t }
, and a payment policy, denoted by x = {xt }
.
The decision policy concerns the outcome of the auction
mechanism and the payment policy handles the collection of
payments from winning bidders. A direct revelation mechanism does not allow each bidder to report more than once
about its type [20]. The decision t (ht ) K (ht ) is made
in state ht and consequently the payment xti (ht ) R+ is
collected from the winner i I (ht ), where K (ht ) represents
the set of all feasible decisions in that time period and I (ht )
indicates the bidders for which t [ai , di ] and, hence, are
considered active in state ht [20].
Definition 3: The utility of a bidder in the online auction
setting is the difference of its achieved reward (or equivalently
its valuation estimate of the item) and the final payment to the
auctioneer, i.e., vi (i , k t ) xti (ht ). Note that t [ai , di ].
The decision policy is assumed to be deterministic in this
paper.
B. Collusion Via Misreports
A desired property of the designed mechanism, i.e., the
auction to lease the re-usable goods, is its robustness to
collusion. The most common source of collusion in this
context is misreporting of the type of the bidder. The collusion
might arise in reporting the arrival time instance, the departure
time instance, or the valuation of the auctioned item. The
misreport of arrival time addressed here is referred to as late
arrival, where a bidder might delay the report of its starting
time. Similarly, misreport of departure time assumed here
is known as early departure, in which case the bidder will

859

report its latest time instant of interest in the auctioned good

sooner than the actual departure time instance, i.e., di di . A
misreport of valuation is similar to the case of static auctions,
whereby some bidders in collaboration with each other submit
their valuation such that the winning bidders acquire the item
for a lower cost than if truthful valuations were reported.
In this work we assume a limited misreport condition,
denoted by C (i ), which refers to the case in which no
early arrival and late departure misreports can exist and the
dynamics of misreport of each type element is limited to its
feasible set. For instance, in early arrival (or late departure
misreports), the adjusted arrival instant (or departure instant)
should satisfy ai T (or di T ). The limited misreport
assumption is valid in most practical scenarios. For example,
the type of a bidder might not be completely known by
the bidder itself prior to its arrival time. To better visualize
the aforementioned concepts, let us introduce the following
example (inspired by [19]).
Example 1: Consider a spectrum license holder that faces
underutilized spectrum resources due to lack of traffic load
(spatially and/or temporally), and uses an auction mechanism
to lease the idle bands. For clarity of exposition, assume
only one spectrum band at each expiry period of duration
T is auctioned, similar to Fig. 1. The expiry property of
the auctioned item in this context refers to the fact that,
after the expiry period, the leased frequency band will be
redeemed in order to accommodate the primary operators
load variations. However, an alternative primary frequency
band will become available for lease for another T seconds
due to the aforementioned temporal or spatial load variations.
The random event, , affecting the decision policy of the
auctioneer in this case is the random availability of one-outof-m primary channels to auction.
In this setup, secondary users, which are referred to as
Cognitive Radios (CRs), are interested in sending their traffic
in the primary spectral ranges. Due to the bursty nature of
packetized data transfer, each CR is only interested in the
primary bands when it has traffic to send. This practical
consideration, therefore, is a manifestation of the limited
misreport property, whereby the arrival time of a given CR
is not known to itself until traffic has been received in its
buffer.
Consider three competing CRs, with types 1 =
(t0 , t0 + T, w1 ), 2
= (t0 , t0 + T, w2 ) and 3
=
(t0 + T, t0 + T, w3 ), where w1 > w2 > w3 , t0 , t0 + T T .
Based on the definition of type provided, (t0 , t0 + T, w1 ),
for example, means that the secondary CR1 wishes to rent the
spectrum at either period t0 , or at the latest period t0 + T ,
and its bid announces a valuation of w1 ($)1 . Further, recall
that types are private information to each bidder and can only
be reported once, i.e., upon the arrival period of that bidder,
which in the case of CR1 is t0 .
In a static VCG-style auction, secondary CR1 will win
in period t0 , paying equal to the second highest bid, i.e.,
w2 ($) and leaves the auction. Subsequently, CR2 wins in
1 Note that, in practice, the valuation can also be a function of the time
interval of interest, for example, through introduction of a discount factor,
which means this CR prefers to transmit its traffic as close to its arrival time
as possible.

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Fig. 1.

IEEE JOURNAL ON SELECTED AREAS IN COMMUNICATIONS, VOL. 29, NO. 4, APRIL 2011

m expiring spectral bands available for lease by the primary to secondary CRs only at durations of length T.

period t0 + T for w3 ($), assuming every secondary CR is

truthful. However, if the bidding CRs disclose their private
types to each other a priori, an untruthful CR1 can report
1,collusion = (t0 , t0 + T, w3 + ), for some  > 0 such that
w2 > w3 +, so that CR2 wins in period t0 , paying w3 +, and
then CR1 wins for w3 ($) in period t0 + T . This is an example
of valuation misreport, where, overall, the bidding CRs have
accessed the primary bands for a lower cost of 2w3 +  ($)
than the truthful price of w2 + w3 ($).
An example of a collusion among secondary CRs using
arrival and departure misreport can be considered as follows.
Suppose CR1 delays its bid to period t0 +T , thereby reporting
1,collusion = (t0 + T, t0 + T, w1 ), which results in CR2
winning in period t0 without having to pay anything (because
it does not have a competitor on which the second price can be
determined2), and then CR1 wins for w3 ($) in period t0 + T .
In this manner, the overall cost of utilizing the primary bands
is (unlawfully) further reduced to w3 ($), considerably lower
than the truthful price or even valuation misreport collusion
price.
The most robust approach to combat collusion is to design
the mechanism such that it is Dominant Strategy Incentive
Compatible (DSIC). The DSIC property of a dynamic mechanism with limited misreports C is defined as follows [19].
Definition 4: A mechanism is DSIC iff







,  xi i , i
, 

vi i , i , i
(1)





vi i , i , i , xi i , i , ,

i = (1 , . . . , i1 , i+1 , . . . ) and the possible misreports by

a bidder with true type
 i i is denotedby C (i ) i .
In addition, i =
j and C (i ) =
C (j ).

to be satisfied i i , i C (i ), i i ,

C (i ), and . Furthermore, in (1), (, ) =
i
(k1 , k2 , . . . ) denotes the sequence of decisions and xi (, )
denotes the total payment collected from bidder i, given
type and a realization of stochastic event . Also,

The payment policy of our proposed auction mechanism

is based on charging the winner by the critical value of the
auction. For a specific bidder with type i = (ai , di , (ri , Li ))
and given the deterministic policy , the critical value of
auction is defined as

s.t. i (i , i , ) = 1,

min ri
c
for i = (ai , di , (ri , Li ))
v(ai ,di ,Li ) (i , ) =

if no such ri exists.

(2)

2 This scenario is known as no-reserve auction mechanism. An alternative

approach, used in practice, is to set a reserve price for any auctioned goods,
which results in the sole bidder paying at least that reserved price or otherwise
the item will not be allocated to any bidder.

j=i

j=i

C. Decision and Payment Policy

To fully characterize our designed mechanism, we need to
elaborate on the decision policy as well as payment policy,
which are closely related. The decision policy for bidder i,
with type i in some period t [ai , di ], determines the
allocation of goods to this bidder assuming other bidders
types, i , as well as the specific realization of the random
event are fixed. Further, the range of decision policy
i (i , i , ) always falls within the set {0, 1}.
The payment policy relates to the valuation component
of bidders types, i.e, wi , and determines the price that the
winning bidder should pay. For instance, in traditional highest
bidder auctions, we have

wi , if i = argmax wj ,
 t
j
xi h =
0,
otherwise.
As another example, in the static VCG auction, the payment
will be collected from the highest bidder, but its value equates
to the second highest bid, i.e.,

if i = argmax wl

l
 t  wj ,
and j = argmax wl ,
xi h =

I(ht )\i

0,
otherwise.

SODAGARI et al.: ON A TRUTHFUL MECHANISM FOR EXPIRING SPECTRUM SHARING IN COGNITIVE RADIO NETWORKS

We notice that the critical value for the ith bidder depends
on i ; however, it is independent of the reward ri . In other
words, the critical value is a single positive value such that, if
the valuation of a given bidder is less than that level (assuming
fixed i , ), then the bidder loses. Further note that the critical value only can be calculated by the auctioneer after receipt
of private types of bidders. Therefore, it is not possible for a
bidder to adjust its valuation (i.e., to use valuation misreport)
in order to increase its chances of winning the auction. More
interestingly, as will be discussed later, the optimal valuation
strategy of each bidder when the auctioneer uses critical value
payment policy is to report its truthful valuation, thereby
alleviating any incentive for collusion. Finally, recall from
Section III-A that we assume vi (i , k) = ri , and thus the
auctioneer possess all the necessary information to calculate
the critical value price based on the reported types of the
bidders.
Example 2: To demonstrate the strategy-proof nature of the
critical value payment policy, consider the following simple
example. Assume there are three bidders with similar arrival
and departure times, but different valuation for the auctioned
sub-channel. The types of the bidders are thus 1 = (a, d, w1 ),
2 = (a, d, w2 ), and 3 = (a, d, w3 ). Assume the third bidder
is not truthful (e.g., it knows the bid price information of other
bidders through collusion) and, further, its true valuation of
the sub-channel is higher than both first and second bidders,
i.e., w3 > max (w1 , w2 ). Then, by reporting any bid value
max (w1 , w2 ) < w3 , this third bidder wins the auction.
The auctioneer charges the third bidder based on critical
c
value pricing, which in this scenario is v(a,b,L
(1 , 2 , ) =
3)
max (w1 , w2 ). As the charged price for the third bidder is
independent of its bid price, as long as the bid price satisfies
the condition max (w1 , w2 ) < w3 and, given its true
valuation w3 satisfies this constraint, the third bidder has no
incentive to report untruthfully.
On the other hand, assume w3 < max (w1 , w2 ). In order to
win the auction, the third bidder needs to report a valuation
max (w1 , w2 ) < w3 ; however, this untruthful bid
is higher than the true valuation of the third bidder, i.e.,
w3 > w3 . Upon winning the auction, the auctioneer will
charge the third bidder according to the critical value pricing,
in which case the bidder will need to pay an extra cost equal
to max (w1 , w2 ) w3 for the sub-channel, which implies a
negative utility and is not desirable. So, again, the optimal
policy for the third bidder is to report its true valuation, which
makes critical value pricing a truthful mechanism. Please note
that, in this special case where the arrival and departure of
all bidders are similar, the critical value pricing resembles the
second-highest bid value in a VCG-style auction. However, the
proposed critical value pricing generalizes the second-highest
bid pricing to the cases of different arrival or departure time
for bidders, which is a more practical scenario is a real-life
situation.
We are now ready to define the monotonicity property for
the policy as follows [19]. Define the partial order  over
the set of types of bidders, , such that
i  i (ai > ai ) (di < di ) (ri < ri ) (Li = Li ).

861

Then, the deterministic policy is monotonic if

c
(i , ))
(i (i , i , ) = 1) (ri > v(a
i ,di ,Li )
i (i , i , ) = 1,

which is satisfied i , i  i and .

Lemma 1: Any truthful online mechanism, defined over a
deterministic decision policy that satisfies Individual Rationality (IR), must collect a payment equal to the critical value
from each allocated bidder [19].
Therefore, the payment policy of the proposed online auction design can be derived as (3), at the top of the next page.
This price will be collected from the winning bidder upon its
departure from the auction.
Next, we will proceed with the detailed problem statement
by expressing the types including valuation components in the
CR environment nomenclature, which, when combined with
the critical value pricing, yields a truthful dynamic spectrum
leasing auction.
IV. N ON -P RIVATE S ET OF D ESIRED BANDWIDTH
A LLOCATIONS
In the proposed auction model, represents a random
event affecting the allocation policy. As mentioned previously,
for the spectrum sharing problem with m primary channels,
this random event can be interpreted as the random availability
of one-out-of-m channels for the auction process in any given
expiry period. Equivalently, this random channel availability
can be considered as a realization of the stochastic channel
gain, which will manifest a different value for each bidding
CR. Formally, at a specific expiry period t T ,


t
(4)
t = g1t g2t . . . , g|I(h
t )| ,
where git denotes the channel gain for CRi in period t, I (ht )
is the set of active (i.e., bidding) CRs during this period, and
|.| denotes the cardinality of a set.
We will assume that, at the beginning of each auction
period, the participating CRs are allowed to perform a quick
channel sounding to measure the channel quality from their
perspectives. Recall from the previous section that each CR
can only report its type at the beginning of its arrival time.
Hence, the value of each channel gain git can be assumed to
be known for any secondary CRi I (ht ) right before the
start of the auction. As a widely used strategy, the valuation
function of each CR then can be based on their ergodic
capacity (throughput) of the channel, i.e.,


Pi g t
wi = log 1 + 2 i ,
(5)
i
where Pi is the transmission power, is a proportionality
$
constant to the monetary cost ( Nats/s/Hz
), and i2 is the noise
power for CRi at period t. The transmission power is assumed
to be fixed given that, in the absence of primary users as well
as any other secondary CR in the auctioned band, the winning
secondary CR can transmit with its maximum transmit power.
Alternatively, other possible parameters such as the type of
application for that secondary CR can be used to define the
valuation, though these other valuation possibilities have not
been considered in this paper due to space limitations.

862

IEEE JOURNAL ON SELECTED AREAS IN COMMUNICATIONS, VOL. 29, NO. 4, APRIL 2011






c

i , 

,
if

= 1,

i
i
i

ai ,di ,Li
 
,
xti ht =
0,
otherwise,

0,

The collusion possibilities among secondary CRs can be of

the form of arrival and departure time misreports as well as
valuation misreports. For the case of secondary CRNs, it is
realistic to assume that no late-departure misreports are going
to happen, because it is not to the benefit of CRs to provide
their customers with delayed service.
Lemma 2: In an online spectrum auction mechanism with
deterministic and monotonic policy , early departure collusion is not likely.
Proof: Suppose that, at the decision instant t T , the set of
bidding CRs is denoted by I (ht ). For any given CRi I (ht ),
with the type i = (ai , bi , wi ), if i = argmax wj , then no
j

early departure misreport of the form bi bi will enhance the

chances of winning for this CR at this time instant. Conversely,
if i = argmax wj , and l I (ht ) such that wl = wi , then
j

this CR will win the auction at time t, and will not compete
in the subsequent expiry periods. Therefore, reporting bi
bi will not affect the state of the auction in the consequent
expiry periods. Finally, if CRi along with some other CRl
have submitted an equal highest bid, then the monotonicity of
decision policy dictates the bidder with the longest interest
interval, di ai , will win the auction. In which case, reporting
bi bi will indeed decrease the chances of a CR to win the
auction. Therefore, as we assume IR in our setup, there is no
incentive for a CR to misreport early departure in the proposed
online auction mechanism.
We consider the following spectrum allocation decision
policy in each period:
I ht
t : {0, 1}| ( )| ,
t = 1i (1) , 1i (2) , . . . , 1i (|I (ht )|) ,

where
1A (x) =

(6)

1 xA
0 otherwise

is an indicator function and i = argmax wi . However, when

i

there are two or more secondary CRs with maximum w,

the auctioneer assigns the band in that time to the CR with
the maximum declared di ai in its type to satisfy the
monotonicity property. The reason for this choice lies in the
fact that the colluder will have a shorter access period di ai
than the actual value, due to either late arrival misreport, early
departure misreport, or both.
Since in this online spectrum auction our allocation policy
as mentioned above is monotonic and we also use critical
value payment as the pricing policy, we are going to have a
truthful mechanism [22].
A. Auctioning of Multiple Items
While we limited our discussions throughout Section IV to a
single auctioned primary channel, mechanism extension to the

if t = di

(3)

if t = di

case where several channels at each expiry period are available

is straightforward. In fact, as mentioned previously, the single,
positive valuation of CRi is identically applicable to any channel from the set of desired allocations, Li . Therefore, it is only
required to modify (5) in order to capture the multiple channel
characteristics of the aforementioned scenario. Due to space
constraints, we will briefly introduce several possibilities here,
but will leave the derivation of optimal valuation functions to
our future studies.
One possibility is to use a conservative valuation, based
on the worst case scenario, in which each CR will submit
its bid based on the lowest feasible throughput over the
set of auctioned channels at time t. This valuation choice
guarantees that, if this CR is the winner of auction at time
t, it will achieve at least the minimal feasible throughput. An
alternative strategy is to use the average feasible throughput
for valuation calculations. Further, it is also possible to base
the valuation function not on the quality of the channels being
auctioned, but rather on the priority of buffered traffic. For
instance, if CRi needs to transmit a delay-sensitive traffic load,
it will prefer to use the primary channel even with a lower
channel quality.
B. Price of Truthfulness
In order to quantify the efficiency of online auctions, an
adversary is considered at its worst possible case in choosing
the valuations and arrivaldeparture times and the performance
is compared with the best value of the offline allocation [19].
If z denotes the type corresponding to the available inputs
z Z, to the adversary then for some constant c 1 the
c-competitiveness for efficiency of an online mechanism is


val((z ))
1
(7)
min E
,
zZ
V (z )
c
where val((z )) denotes the total value resulting from the
decision policy for z and V (z ) is value of the best
possible offline allocation [19].
As shown in [19], the spectrum auction discussed here
is 2-competitive for efficiency if there are no early arrival
and no late departure misreports, which implies that it can
achieve within the fraction 12 of the value of the optimal
offline algorithm, whatever the input sequence is. This is
an upper bound on the performance of the mechanism. If
we consider the second price auction, which charges the
winning secondary CR in each period by an amount equal
to the bid immediately after the bid of the allocated CR, its
decision policy is monotonic but it is not truthful because the
payments are not critical-value payments [22]. We will have
a strongly truthful auction and 2-competitive for efficiency
in the expiring-items environment provided that there are no
early arrival and late departure misreports. It can be proven
that, with no early arrival and no late departure misreports,

SODAGARI et al.: ON A TRUTHFUL MECHANISM FOR EXPIRING SPECTRUM SHARING IN COGNITIVE RADIO NETWORKS

250

1.8
1.6

no misreports
misreports

200

1.4

Winning Times

Reward of the winning secondary CR in each period

863

1.2
no collusion
50% collusion

150

100

0.8
50

0.6
0.4

0
0

10

15

20

25

Cheating Secondary CRs

0.2

10

20

30

40
Number of periods

50

60

70

80

Fig. 2.
Comparison of average rewards of winning secondary CRs in
misreporting and truthful cases.

Fig. 3. Winning times for secondary CRs for truthful and untruthful cases
for the total number of secondary CRs equal to 40 (half of them committing
misreporting collusion) and the available number of periods equal to 20 with
100 Monte-Carlo iterations.

no truthful, IR, and deterministic online auction can obtain a

better approximation for efficiency. This difference between
VCG and online auction values is in fact the price of truthfulness, or collusion-resistance of our deployed scheme on the
primary side, whereas the winning secondary CRs in this case
are rewarded more than offline VCG. If we relax the condition
of departure misreport, and if the dynamic auction is IR and
truthful, then the approximation ratio for the efficiency cannot
be a constant [19].
V. S IMULATION R ESULTS
In order to show the anti-cheating property of the
deployed
method,  we assume the channel gain t =

t
t
t
g1 , g2 , . . . , g|I(h
to be almost constant during one period
t )|
and generate signal-to-noise ratio (SNR) values in order to
calculate wi .
We define the reward of each winning secondary CR as the
difference between wi and the critical value (charged from that
CR). Fig. 2 shows how the reward of secondary CRs drops
if there is misreporting collusion among them in comparison
with the no-cheating case. Note that scarce peaks are due to
the fact that, in the 50% collusion case, we are measuring the
reward of a mixture of honest and cheating nodes.
The simulations in Fig. 2 were performed assuming there
are m = 75 bands available by the primary and there are 80
secondary CRs willing to access the resources. Half of them
try to give false information for their arrival and departure as
late arrival and early departure untruthful types as explained
in Example 1. The valuations were generated through random
uniform SNRs in the range of 10 to 35 dB and using the
ergodic capacity of the channel (Section IV).
In Fig. 3 we demonstrate via our mechanism how the
secondary CRs winning chances decrease significantly if they
do not report their true types. The simulations for Fig. 3
were conducted for the number of available periods m = 20,
number of participating secondary CRs equal to 40, and
assuming half of them are colluding through late arrival
and early departure misreports. We used the Monte-Carlo
method with 100 iterations and recorded the winning times
of secondary CRs in the two cases where they are truthful

Average value of winning CRs in each period (m = 20)

1.4
Critical Value
2nd Price
1.2

0.8

0.6

0.4

0.2

0
10

20

30
40
50
60
70
80
Number of participating secondary CRs

90

100

Fig. 4. The average reward of winning CRs vs. the total number of bidding
CRs for 20 available spectral bands for the static VCG and the online auction.

and untruthful. As is evident in the figure, for a dominant

number of times the winning chances of the same CRs in
the untruthful case are even negligible in comparison with the
truthful case.
We also compared the proposed dynamic spectrum allocation algorithm with the static VCG auction. For the fixed number of periods m = 20, we varied the number of secondary
CRs from 10 to 100 and generated the types of secondary CRs
by random numbers uniformly distributed between 1 to m for
the arrival periods and ai to m for departure periods. Again,
we assumed the channel gain variations to be negligible during
one period. We defined the reward of each winning secondary
CR as the difference between the valuation component and
the critical value wi v c (charged from that CR) and plotted
the average rewards of the winning CRs during the m = 20
periods as the number of CRs varied for both the proposed
auction and the static VCG (second price auction).
In the second configuration, we varied the number of
channels (m) from 5 to 20 while the number of secondary CRs
were fixed at 25 and generated the types as described above.
This time we plotted the average reward of winning CRs
vs. the number of channels for the monotonic critical value
auction and the static VCG or second price auction(Fig. 5).

IEEE JOURNAL ON SELECTED AREAS IN COMMUNICATIONS, VOL. 29, NO. 4, APRIL 2011

1
critical value
2nd price

0.9

3000
2500
Primary revenue

Average value of winning CRs in each period (No. of Secodarys = 25

864

0.8
0.7
0.6

Primary revenue

1000
500

80

20

60

15

40

0.4

Number of periods

10

20
0

Number of participating secondary CRs

0.3
0.2

10
15
Number of available bands

20

Fig. 7.

Primary revenue for offline VCG.

have shown the superior performance of this auction strategy

as well as its resistance to collusion.
R EFERENCES

80

60

40

Number of periods

Fig. 6.

1500

0
100

0.5

Fig. 5. The average value of winning CRs vs. the number of available spectral
bands for 25 secondary CRs for the static VCG and the online auction.

3000
2500
2000
1500
1000
500
0
100

2000

20

20
15
10
Number of participating secondary CR

Primary revenue for the deployed auction.

Fig. 6 and Fig. 7 compare the total revenue of the primary

for the two cases of online and offline VCG, respectively.
As is evident from the figures and mentioned previously, the
maximum revenue of primary in the static VCG is around 2500
whereas in our case is about 2000. On average, the primary
revenue in our case is less than half of that of the static VCG
auction, whereas the winning CR reward is more than that
of the offline VCG and the efficiency ratio is not a constant.
In fact, if we want to have a truthful auction this decreased
revenue is inevitable and no better solution has been proposed
so far.
VI. C ONCLUSIONS
As the demand for radio spectrum increases, there is an
opportunity for spectrum license holders to access an extra
source of revenue through leasing their spectral ranges to
secondary users. A powerful tool to realize such subletting of
spectrum is auction mechanisms. In this paper, we proposed
a dynamic, online auction for secondary spectrum access.
In the proposed auction structure, secondary CRs not only
will submit their valuation of auctioned spectrum band, but
also their arrival and departure time instances. This dynamic
auction can better reflect the bursty nature of packet-based
communications and can be performed online as opposed to
current static auction models such as the second-price VCG
auction. Furthermore, in order to make the proposed auction
robust against collusion, in terms of arrival and departure
misreports as well as valuation misreport, we devised efficient
allocation and pricing mechanisms. Our simulation results

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Shabnam Sodagari received the B.Sc. degree

from Sharif University of Technology, Tehran, Iran,
MASc from the University of Ottawa, and PhD from
the Pennsylvania State University, all in electrical
engineering. Her research interests include cognitive
radio, wireless and mobile communications, and
image processing.

865

Alireza Attar received his PhD from Kings College London, where he was awarded the UKs Virtual Centre of Excellence in Mobile and Personal
Communications (Mobile VCE) scholarship. He is
currently a Post-Doctoral Fellow at the department
of electrical and computer engineering, University
of British Columbia, Vancouver, BC, Canada. His
main areas of interests are cognitive radio, adaptive
radio resource allocation techniques, Game Theory, optimization techniques, MAC and scheduling
mechanism. Alireza is a leading co-guest editor for
the IEEE Journal on Select. Areas in Commun., special issue on Game Theory
in Wireless Communications. Further, he served as a co-guest editor for
the IEEE Trans. on Vehicular Tech., special issue on Achievements and the
Road Ahead: The First Decade of Cognitive Radio, which was published in
May 2010. He has served as TPC co-chair for the International Workshop
on Cognitive Wireless Communications and Networking (CWCN), and as
publications chair for IEEE International Conference on Ultra-Wideband
(ICUWB), both in 2009. He has been an active member of TPC for most
major IEEE conferences in Communication, Signal Processing and Vehicular
Technology societies for the past couple of years and has reviewed numerous
papers for over a dozen IEEE, IET, IEICE and Elsevier journals. Alireza is a
member of IEEE and is a co-recipient of INTERNET09 best paper award.

Sven G. Bilen, PhD, PE (BS Penn State 1991,

MSE 1993 and PhD Univ. of Michigan 1998) is
Associate Professor of Engineering Design, Electrical Engineering, and Aerospace Engineering at Penn
State and Head of the School of Engineering Design,
Technology, and Professional Programs. He is a
member of the EE Departments Communications
and Space Sciences Laboratory and also a member
of the Propulsion Engineering Research Center. He
serves as the Chief Technologist for the Universitys
Center for Space Research Programs. Prof. Bilens
research interests, coordinated through his direction of the Systems Design
Lab, include the areas of space systems design; electrodynamic-tethers;
spacecraft-plasma interactions; plasma diagnostics for space plasmas, plasma
electric thrusters, and semiconductor plasma processing; software-defined
radio techniques and systems; wireless sensor systems; innovative engineering
design, systems design and new product design; engineering entrepreneurship;
and global and virtual engineering design.