SummaryCooperative relaying has emerged as an efficient transmit strategy in wireless networks affected by fading. In multirelay scenarios, the performance of cooperative systems is heavily influenced by resource allocation among the available relays. However, in practical scenarios, a relay may not help unless the cooperation improves its own utility. To address the above problem, this paper introduces a novel integrated game-theoretic framework that involves incentivebased optimal power allocation among the cooperating relays. Coalition formation game has been used to model the cooperation among relays that is integrated into a Stackelberg game, for considering the benefits of source and relays jointly. The game theoretic framework has been implemented with an objective to find an optimal and stable coalition set of relays that not only maximizes their utilities but also helps the source to allocate the optimal power to the relays at the optimal price, thereby increasing its utility too. Simulation results have confirmed that the proposed game theoretic solutions achieve comparable performance in system throughput as compared with the centralized approach. Relay communication is a promising exemplar for future wireless networks. Through relaying, cooperative communication can enhance performance, reduce battery consumption, increase network lifetime, and improve throughput of the systems. 1 Ubiquitous systems defined by International Telecommunication Union require at least 10 times higher data rate than that fulfilled in legacy cellular networks. To obtain such high data rates without increasing the number of base stations and operating costs, it is necessary to introduce relay-assisted communication in general and cooperation between individual relays in particular. The relay-based architecture and cooperative multipath technologies have attracted much attention worldwide. Today, most of the standards for future mobile communication systems viz 3GPP, 3GPP2, B3G, and 4G, Wireless Local Area Network, and broadband wireless networks (IEEE 802.16j) utilize the concept of relaying and frequently take into account the problems related to relay-assisted communication and cooperation. 2 The Wireless World Initiative New Radio project has a detailed planning for ubiquitous broadband mobile radio relaying system. 3 In relay systems, energy efficiency is considered as one of the most important issues because the power of mobile users is a scarce and limited resource. 4 With the combination of relaying and other emerging technologies,