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Abstract-We study the influence of transmission costs on the behavior of selfish nodes in wireless local area networks. Intuitively, it seems that transmission costs should have a stabilizing effect as (rational) nodes will defer packet transmissions when congestion develops and the cost for (successfully) transmitting a packet becomes high. In this paper we investigate whether this intuition is true. We use slotted Aloha to model the communication channel where we model the interaction among nodes as a non-cooperative game. For this game, we study the existence and properties of a (symmetric) Nash equilibrium. We show that the existence of a transmission cost is not always sufficient to guarantee stability. In particular, a stable equilibrium strategy will not exist if the transmission cost is too small. We then propose and analyze a price-based mechanism to guarantee stability and to optimize system performance in terms of throughput and delay. I. INTRODUCTIONAn important feature of wireless networks is that packet transmissions incur a cost in terms of battery energy. Intuitively, it seems that transmission costs should have a stabilizing effect as nodes will defer packet transmissions when congestion occurs and the cost for (successfully) transmitting a packet becomes high. In this paper we investigate this intuition and its implication for the design of protocols.For our analysis, we consider the situation where wireless nodes communicate over a random access channel. That is, whenever a node has a new packet to send, it will do so immediately. If the packet collides (interferes) with a packet sent by another node at the same time, then it is lost and has to retransmitted at a later time. Here, we assume that nodes are selfish and make the decision of (a) when to accept a new packet and (b) when to retransmit a backlogged packet in order to maximize their net benefit. To characterize the net benefit, we assume that (a) nodes obtain a reward for successfully transmitting a packet (where different packets can have different rewards) and (b) each transmission attempt incurs a cost (which is the same for all packets).Note that under the above model, nodes will try to avoid to transmit/retransmit packets during periods when collisions are likely to occur, as this would decrease the likelihood of a successful transmission and increase the expect cost for successfully transmitting a packet. This observation suggests that transmission costs have a stabilizing effect in the sense that during time of congestion (i.e. when collisions occur frequently) nodes will back-off and hence prevent that the channel becomes clogged. In order to investigate whether this intuition is indeed true, we model the interaction among nodes as a non-cooperative game, and study the existence and properties of a (symmetric) Nash equilibrium. In particular, we are

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