Sealed‐Bid Reverse Auction Pricing Mechanisms for Federated Satellite Systems

This paper develops a framework to simulate and evaluate pricing policies of spacecraft trading commodities, such as data routing, in a federated satellite network. Federated satellite systems allow the reallocation of underutilized assets, enabling their use as services between owners and third parties. The paper, by means of game theory, focuses on sealed‐bid reverse auction pricing schemes, benchmarks first‐price and second‐price auction strategies, and evaluates the associated trade‐offs in terms of performance and cost, and losses in Pareto efficiency introduced by system‐level operation constraints. The analysis considers an application case study for federated satellite systems operating in Low Earth Orbit for commercial purposes. Satellite federations are a novel paradigm envisioning on‐orbit opportunistic sharing of resources through an ad hoc mobile satellite network. The architecture creates the basis for the realization of a commercial cloud computing environment in orbit, with spacecraft establishing communications links between each other leveraging on system design margins. The results of the case study in space provide new insights on the design of federated satellites and their operations while characterizing emergent behaviors and efficient trade‐offs on the Pareto front of the cost–performance curve.