  This paper introduces a novel concept from coalitional game theory which
allows the dynamic formation of coalitions among wireless nodes. A simple and
distributed merge and split algorithm for coalition formation is constructed.
This algorithm is applied to study the gains resulting from the cooperation
among single antenna transmitters for virtual MIMO formation. The aim is to
find an ultimate transmitters coalition structure that allows cooperating users
to maximize their utilities while accounting for the cost of coalition
formation. Through this novel game theoretical framework, the wireless network
transmitters are able to self-organize and form a structured network composed
of disjoint stable coalitions. Simulation results show that the proposed
algorithm can improve the average individual user utility by 26.4% as well as
cope with the mobility of the distributed users.
