Dynamic Contract Design for Cooperative Wireless Networks

Cooperative communication is a promising technique to mitigate channel impairment and improve spectrum efficiency. Due to the selfish nature of relay nodes, how to provide proper long-term incentives for relay nodes in dynamic communication environments is an essential issue. In this paper, a two-period dynamic contract is proposed under the dynamic asymmetric information scenario. Considering the relay nodes' types are independent in both periods with identical probability distribution, the contract-theoretic model for ability discrimination relay selection is formulated. And the necessary and sufficient conditions for the optimal contract are systematically characterized. To maximize the source's expected utility, a sequential optimization algorithm is proposed to obtain the optimal relay-reward strategy. Simulation results show that the optimal dynamic contract design scheme is effective in improving system performance for cooperative communication.