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The problem of sensor resource management for multitarget tracking in decentralized tracking systems is considered here. Inexpensive sensors available today are used in large numbers to monitor wide surveillance regions. However, due to frequency, power, and bandwidth limitations, there is an upper limit on the number of sensors that can be used by a fusion center (FC) at any one time. The problem is then to select the sensor subsets to be used at each sampling time in order to optimize the tracking performance (i.e., maximize the tracking accuracy of existing tracks and detect new targets as quickly as possible) under the given constraints. The architecture considered in this paper is decentralized in which there is no central fusion center (CFC); each FC communicates only with the neighboring FCs, as a result communication is restricted. In such cases each FC has to decide which sensors should be used by itself at each sampling time by considering which sensors can be used by neighboring FCs. An efficient optimization-based algorithm is proposed here to address this problem in real time. Simulation results illustrating the performance of the proposed algorithms are also presented to support its efficiency. The novelty lies in the discrete optimization formulation for large-scale sensor selection in decentralized networks.