Relay Selection for OFDM Wireless Systems under Asymmetric Information: A Contract-Theory Based Approach

User cooperation although improves performance of wireless systems, it requires incentives for the potential cooperating nodes to spend their energy acting as relays. 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 system that employs decode-and-forward (DF) relaying. We first design incentive compatible offers/contracts, consisting of a menu of payments and desired signal-to-noise-ratios (SNR)s at the destination. The source then broadcasts this menu to nearby mobile nodes. The nearby mobile nodes which are willing to relay, notify back the source with the contracts they agree to accept in each subcarrier. We show that when the source is under a budget constraint, the problem of relay selection in each subcarrier with the goal of maximizing capacity is a nonlinear non-separable knapsack problem. We propose a heuristic relay selection scheme to solve this problem. We compare the performance of our overall mechanism and the heuristic solution with a simple relay selection scheme. Selected numerical results show that our solution performs better and is close to optimal. The benefits of the overall mechanism introduced in this thesis is that it is simple to implement, needs limited interaction with potential relays and hence it requires minimal signalling overhead.