Options and overbooking strategy in the management of wireless spectrum

Abstract

Dynamic spectrum management makes it possible for the owner of usage rights on some frequency blocks to sublet each of them in real time and for a limited period of time. As a softer implementation with respect to the spot market a two stage assignment is here proposed through the use of options, which give buyers the right to purchase the usage right on a single block and for a timeslot. In the sale of options the primary owner may accomplish an overbooking strategy, which consists in selling more blocks than the available ones, and acts as a hedging tool against the risk of unsold blocks. A model for the overbooking strategy is described and evaluated, which takes into account both the value of the option, the correlated decisions taken by the prospective purchasers, and the penalty to be paid to the unsatisfied customers. The dependence of the economical convenience of the overbooking strategy on the relevant parameters (among which the penalty value and the overbooking ratio) is shown for a significant range of cases.

Towards risk-aware communications networking

“…Buying such rights on demand could not be possible, because the alternative network is not available, or could prove to be too expensive when the offering party uses its dominant position, taking advantage of the urgent need of the provider having outage problems in its network. A preventive purchase of usage rights is represented by the option for leasing spectrum examined in [58].…”

Effective Risk Assessment in Resilient Communication Networks

“…Additionally, it has been suggested that it is introduced in network design [8,9,29,49,50]. In response to some disadvantages of VaR, especially the lack of subadditivity (see Sect.…”