Development of dynamic spectrum access and allocation techniques recently have made feasible the vision of cognitive radio systems. However, a fundamental question arises: Why would licensed primary users of a spectrum band allow secondary users to share the band and degrade performance for them? And how can we design incentive schemes to enable spectrum sharing using cooperative communication schemes? We consider a principal-agent framework, and propose a contractsbased approach. First, a

more »

... e primary and a single secondary transmitter-receiver pair with a Gaussian interference channel between them are considered. The two users may contract to cooperate in doing successiveinterference cancellation. Under full information, we give equilibrium contracts for various channel conditions. These equilibrium contracts yield Pareto-optimal rate allocations when physically possible. We then allow for time-sharing and observe that in equilibrium contracts there is no actual time-sharing. We show that the designed contracts can be made robust to deviation by either user post-contract. We also show how these can be extended to multiple secondary users. We show that under hidden information, when the primary user has a dominant role, neither user has an incentive to lie about their direct channel coefficients, or manipulate the cross channel measurements, and Paretooptimal outcomes are achieved at equilibrium.