This paper studies a wireless network where multiple users cooperate with each other to improve the overall network performance. Our goal is to design an optimal distributed power allocation algorithm that enables user cooperation, in particular, to guide each user on the decision of transmission mode selection and relay selection. Our algorithm has the nice interpretation of an auction mechanism with multiple auctioneers and multiple bidders. Specifically, in our proposed framework, each user

more »

... cts as both an auctioneer (seller) and a bidder (buyer). Each auctioneer determines its trading price and allocates power to bidders, and each bidder chooses the demand from each auctioneer. By following the proposed distributed algorithm, each user determines how much power to reserve for its own transmission, how much power to purchase from other users, and how much power to contribute for relaying the signals of others. We derive the optimal bidding and pricing strategies that maximize the weighted sum rates of the users. Extensive simulations are carried out to verify our proposed approach.