Sequential Bargaining in Cooperative Spectrum Sharing: Incomplete Information with Reputation Effect

Yang Yan, Jianwei Huang, Xiaofeng Zhong, Ming Zhao, Jing Wang

Abstract: Cooperative spectrum sharing can effectively improve spectrum usage by allowing secondary users (SUs) to dynamically share the licensed bands with primary users (PUs). Meanwhile, an SU can relay a PU's traffic to improve the PU's effective data rate. In this paper, we consider a sequential spectrum bargaining process to achieve cooperative spectrum sharing between one PU and one SU over multiple time slots. The SU may be a Low type or a High type, depending on its energy cost. Such information is private to the SU and is unknown to the PU. We model such a dynamic bargaining with incomplete information as a dynamic Bayesian game, and characterize several types of equilibria under different system parameters. In particular, we show that a Low type SU may maximize its total utility by utilizing the reputation effect, i.e., rejects profitable offers initially in order to create the reputation of a High type SU.