Wireless telecommunications are undergoing substantial policy reforms in pursuit of better spectral efficiency. A key element in these reforms entails granting full property rights to spectrum license holders, thereby paving the way to secondary spectrum markets. Spectrum markets hold a remarkable potential to increase spectrum utilization by making it available to a larger fraction of public at lower cost. Yet, although a favorable regulatory framework has been in effect in the last few years, liquidity of spectrum markets is inhibited due to uncertainties perceived by spectrum license holders. These uncertainties stem from complex relationships between effects of electromagnetic interference and economic considerations. This research involves a constructive study of viability of spectrum markets by establishing methods and algorithms that render such markets profitable for their participants.
The investigators focus on analytical study of profitability of spectrum markets, and its empirical verification. Main thrusts of the research program are: (i) fundamental elements of pricing and interference externalities for efficient and economically viable use of spectrum; (ii) algorithms for spot market use and real-time measurement-based pricing policies; (iii) empirical techniques for testing demand model specification, and formative models of demand-price relationships via experimental studies. This research is interdisciplinary and it is based on identifying incarnations of both novel and classical notions in economics in the specific context of wireless communications and spectrum markets.
The research impacts legal and economic policies for the future wireless industry and provides a tool for assessing potentials of the secondary spectrum market.
