Cooperative communication when other mobile nodes could act as potential relays, poses significant challenge in designing relay selection algorithms due to the information asymmetry between the source and the potential relays. The potential relays in this case are better informed about their channel conditions than the source. Therefore, the source must provide them with incentive to reveal their information and hence for their participation in relaying. In this paper, we study the problem of relay selection under a budget constraint when there is such an information asymmetry. By leaving the bargaining power only to the source, we propose a simple relay selection mechanism that requires limited interaction with potential relays and their participation is also voluntary. We will first use contract theory to formulate incentive compatible contracts that can be broadcasted to nearby mobile nodes which can act as potential relays. Once these mobile nodes notify the contracts they are willing to accept, source then optimally selects a set of relays based on this information. We analyze the performance of this mechanism by simulations and discuss the effect of information asymmetry.
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