Contract Theory in Cognitive Radio
Yanming Cao
2012/05/XX
BACKGROUND
What is Contract?
Employer VS Employee
time-salary
The Basic idea of Contract
One to One
The key to implement it is “type”!
Three Basic Contract Model
1. Screening-simplest but complete & powerful
2. Signaling-closer to reality, but complicated
3. Moral Hazard-”effort” or in other words results
We mainly focus on screening model.
But the Moral Hazard model is also interesting.
Basic Contract Formulation
Type is θ
Ϲ = {q,π}
q(θ)
IC(incentive compatible):
V ( , q( ))   ( )  V ( , q( ))   ( ),    
IR(individual rationality):
V ( , q( ))   ( )  V ( , Na)   ( Na)  0
Feasibility Of Contract
For a feasible contract:
1  2 
 T
Two Lemmas:
L.1  qi  q j   i   j
L.2  i   j  qi  q j
q1  q2 
 qT
1   2 
 T
Feasibility Of Contract
*From Lin Gao “Spectrum Trading in Cognitive Radio Networks: A Contract-Theoretic
Modeling Approach”
More Complicated
We See in the previous model, there is only one
type! But this does not fit our real world.
For example:
Work Experience
work ability -> Communication Skill
Team Work
Multi-type!!!!
Multi-type Contract
Which means two or more types contract!
The Key Problem now is IC & IP & Two L
For two or more variables, it’s hard to even define
it.
Multi-type Contract
Solution 1:
Combination with limitation.
It can convert the Multi-type to single
type.
But not always can find a limitation.
Solution 2:
Combination without limitation.
More real.
Only can derive the exist of OP-
Multi-type Contract
* My Paper ”Two-dimensional Contract Theory in Cognitive Radio Networks”
Moral Hazard
More Interesting!
The dominant right now is on the SU.
SU will pay considering the “effort” of PU
-------------- The slots that PU can guarantee
Conclusion
Pure Contract Study is more and more
uninteresting.
Combination is a good way :
eg. Auction & Contract
Game & Contract
Thank You！