— The rapidly growing demand for wireless communication makes efficient power allocation a critical factor in the network’s efficient operation. Recently power allocation in wireless systems has been addressed by “pricing” methods. However, when interference is present in a wireless system, pricing methods do not result in globally optimal power allocations because of the presence of externalities. Externalities are present because each user’s transmission creates interference to other users and directly affects their utilities; therefore, standard efficiency theorems on market equilibrium do not apply. In this work we formulate the power allocation problem for a wireless mesh network as a decentralized allocation problem with ‘externalities’. We consider a decentralized system where users’ utilities and channel gains are private information and the system has multiple interference temperature constraints to control interference. We present a decentralized mechanism ...