Cooperative protocols attempt to create spatial diversity in slow flat fading scenarios. It is well known that diversity is more effective at low SNR where binary input is (close to) optimal. With special emphasis on simple relays and low SNR, where accurate channel estimation is difficult, we consider a binary-input noncoherent demodulate-and-forward cooperative protocol. We assume that symbol-by-symbol decisions at the relay and destination are obtained using differential encoding/decoding and we develop an upper bound for the outage capacity for slow Rayleigh flat fading channels. For comparison purposes, we compute the outage capacity of binary-input differential encoding/decoding direct transmission. We observe that the ε-outage capacity achieved using differential encoding/decoding is much smaller than that of the coherent case. Furthermore, we observe that, as in the coherent case, the DmF protocol outperforms direct transmission at low outage probability, while at moderate and high outage probability the opposite happens.
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