Contract-based Relay Selection Mechanism for OFDM Wireless Systems

User cooperation although improves performance of wireless systems, it requires incentives for the potential relays to spend their energy for cooperation. Moreover, these potential relays are better informed than the source about their transmission costs, which depend on the exact channel conditions on their relay-destination links. This results in asymmetry of available information between the source and the relays. In this paper, we use contract theory to tackle the problem of relay selection under asymmetric information in OFDM-based cooperative wireless systems. We first design incentive compatible offers/contracts, consisting of a menu of payments and desired signal-to-noise-ratios (SNR)s at the destination and then the source broadcasts this menu to nearby mobile nodes. Once the source is informed about the contracts the potential relays are willing to accept in each subcarrier, the problem of relay selection in each subcarrier while maximizing the capacity under a budget constraint is shown to be a nonlinear non-separable knapsack problem and we propose a heuristic solution. We compare the performance of our overall mechanism and the heuristic solution with a simple relay selection scheme and find our solution to perform better and close to optimal. The overall mechanism introduced in this paper is simple to implement, requires limited interaction with potential relays and hence requires minimal signalling overhead.