Battery power is a precious resource in wireless ad-hoc networks, and most routing protocols that have been proposed so far do not generate cost efficient routes. In this thesis, a novel auction-based cost-aware routing scheme, called CARA, is presented. CARA is designed as an extension of the MAC layer, and is shown to improve the cost efficiency of existing ad-hoc routing protocols through dynamic power control, while introducing only minimal additional overhead. The MAC layer at each node is given the capability to run local sealed-bid second-price auctions for the user data packets that need to be transmitted, and to determine any neighbor nodes that reduce the transmission cost to the next hop identified by the network layer. Existing network layer routing protocols are utilized with no changes or impact on their operation. Selforganized networks, where nodes are greedy and selfish, are being supported through the proposed auction-based framework.