Cognitive radio (CR) can significantly alleviate the network pressure caused by the rapid development of wireless communications through allowing secondary users (SUs) to obtain spectrum resource from primary users (PUs). One key issue of CR technology is spectrum sharing, that is, how spectrum should be allocated between SUs without causing interference to PUs. In this paper, we propose a bilateral bargaining mechanism to achieve this goal between two SUs. The general network scenario with multiple SUs can be decomposed into multiple pairs of bilateral bargaining studied in this paper. The SUs have to reach a mutual satisfactory agreement on the partition of spectrum by making alternating offers to each other. We model such bargaining process as dynamic finite/infinite horizon multistage game with observed actions and fully characterize the corresponding subgame perfect equilibria. Moreover, theoretical analysis and numerical results indicate that our proposed scheme can effectively allocate spectrum resource between SUs. Copyright © 2012 John Wiley & Sons, Ltd.
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