Entry, Competition, and Regulation in Cognitive Radio Scenarios: A Simple Game Theory Model

Spectrum management based on private commons is argued to be a realistic scenario for cognitive radio deployment within the current mobile market structure. A scenario is proposed where a secondary entrant operator leases spectrum from a primary incumbent operator. The secondary operator innovates incorporating cognitive radio technology, and it competes in quality of service and price against the primary operator in order to provide service to users. We aim to assess which benefit users get from the entry of secondary operators in the market. A game theory-based model for analyzing both the competition between operators and the subscription decision by users is proposed. We conclude that an entrant operator adopting an innovative technology is better off entering the market, and that a regulatory authority should intervene first allowing the entrant operator to enter the market and then setting a maximum amount of spectrum leased. This regulatory intervention is justified in terms of users utility and social welfare.