Contract design for relay incentive mechanism under dual asymmetric information in cooperative networks

Abstract Cooperative relay network can effectively improve the wireless spectrum efficiency and extend the wireless network coverage. However, due to the selfish characteristics of wireless nodes, spontaneous cooperation among nodes is challenged. Moreover, wireless nodes may acquire the different network information with the various nodes’ location and mobility, channels’ conditions and other factors, which results in information asymmetry between the source and relay nodes. In this paper, the incentive issue between the relay nodes’ cooperative service and the source’s relay selection is investigated under the asymmetric information scenarios. By modeling cooperative communication as a labour market, a contract-theoretic model for relay incentive is proposed to achieve the twin objectives of ability-discrimination and effort-incentive. Considering the feature of asymmetric information, the static and dynamic information of the relay nodes are systematically discussed. To effectively incentivize the potential relay nodes to participate in cooperative communication, the optimization problems are formulated to maximize the source’s utility under the multiple information scenarios. A sequential optimization algorithm is proposed to obtain the optimal wage-bonus strategy with the low computational complexity under the dual asymmetric information scenario. Simulation results show that the optimal contract design scheme is effective in improving the performance of cooperative communication.