Border Games in Cellular Networks

In each country today, cellular networks operate on carefully separated frequency bands. This separation is imposed by the regulators of the given country to avoid interference between these networks. But, the separation is only valid within the borders of a country, hence the operators are left on their own to resolve cross-border interference of their cellular networks. In this paper, we focus on the scenario of two operators, each located on one side of the border. We assume that they want to fine-tune the emitting power of the pilot signals (i.e., beacon signals) of their base stations. This operation is crucial, because the pilot signal power determines the number of users they can attract and hence the revenue they can obtain. In the case of no power costs, we show that there exists a motivation for the operators to be strategic, meaning to fine-tune the pilot signal powers of their base stations. In addition, we study Nash equilibrium conditions in an empirical model and investigate the efficiency of the Nash equilibria for different user densities. Finally, we modify our game model to take power costs into account. The game with power costs corresponds to the well-known Prisoner's Dilemma: The players are still motivated to adjust their pilot powers, but their strategic behavior leads to a sub-optimal Nash equilibrium.