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Efficient resource allocation in wireless network virtualization: A joint design of adverse selection and moral hazard

Wireless network virtualization has been envisioned as a promising technology to enhance resource utilization and reduce expenditure. In this paper, we propose a virtual resource allocation strategy in a mobile virtual network, which reuses spectrum resource to reduce the physical resource that service providers (SPs) need to purchase and also enhance spectrum efficiency. Mobile virtual network operators (MVNOs) benefit not only from sales of the spectrum resource, but also from its reuse levels by SPs. However, the SP's service quality requirement and user channel state information are hidden information to the MVNO, and are the basis needed for the MVNO's resource allocation design. Besides, how many users will be arranged to reuse is a hidden action, independently decided by the SPs themselves, which the MVNO is unable to know. To deal with the two kinds of asymmetric information problems, we design contracts which include two parts of fees charged for each SP. First of all, SPs are classified into different types based on their distinct characteristics and assigned with corresponding resource prices to deal with the hidden information problem. Then to incentivize higher resource reuse level, rank-order tournament (ROT) design is adopted to obtain the MVNO's commission rates for SPs. Numerical results show that our scheme can improve the utility of both SPs and MVNOs as well as the spectrum efficiency.