Market-Based Power Allocation for a Differentially Priced FDMA System

Abstract: In this paper, we study the problem of differential pricing and QoS assignment by a broadband data provider. In our model, the broadband data provider decides on the power allocated to an end-user not only based on parameters of the transmission medium, but also based on the price the user is willing to pay. In addition, end-users bid the price that they are willing to pay to the BTS based on their channel condition, the throughput they require, and their belief about other users' parameters. We will characterize the optimum power allocation by the BTS which turns out to be a modification of the solution to the well-known water-filling problem. We also characterize the optimum bidding strategy of end-users using the belief of each user about the cell condition.