  Cooperation between wireless network nodes is a promising technique for
improving the physical layer security of wireless transmission, in terms of
secrecy capacity, in the presence of multiple eavesdroppers. While existing
physical layer security literature answered the question "what are the
link-level secrecy capacity gains from cooperation?", this paper attempts to
answer the question of "how to achieve those gains in a practical decentralized
wireless network and in the presence of a secrecy capacity cost for information
exchange?". For this purpose, we model the physical layer security cooperation
problem as a coalitional game with non-transferable utility and propose a
distributed algorithm for coalition formation. Through the proposed algorithm,
the wireless users can autonomously cooperate and self-organize into disjoint
independent coalitions, while maximizing their secrecy capacity taking into
account the security costs during information exchange. We analyze the
resulting coalitional structures, discuss their properties, and study how the
users can self-adapt the network topology to environmental changes such as
mobility. Simulation results show that the proposed algorithm allows the users
to cooperate and self-organize while improving the average secrecy capacity per
user up to 25.32% relative to the non-cooperative case.
