  Spectrum reservation is emerging as one of the potential solutions to cater
for the communication needs of massive number of wireless Internet of Things
(IoT) devices with reliability constraints particularly in mission-critical
scenarios. In most mission-critical systems, the true utility of a reservation
may not be completely known ahead of time as the unforseen events might not be
completely predictable. In this paper, we present a dynamic contract approach
where an advance payment is made at the time of reservation based on partial
information about spectrum reservation utility. Once the complete information
is obtained, a rebate on the payment is made if the reservation is released. In
this paper, we present a contract theoretic approach to design an incentivized
mechanism that coerces the applications to reveal their true application type
resulting in greater profitability of the IoT network operator. The operator
offers a menu of contracts with advanced payments and rebate to the IoT
applications without having knowledge about the types of applications. The
decision of the applications in selecting a contract leads to a revelation of
their true type to the operator which allows it to generate higher profits than
a traditional spectrum auction mechanism. Under some assumptions on
distribution of the utility of the applications, closed form solutions for the
optimal dynamic spectrum reservation contract are provided and the sensitivity
against system parameters is analyzed.
