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Wireless medium access control (MAC) protocols such as IEEE 802.11 use distributed contention resolution mechanisms for sharing the wireless channel. In this environment, selfish hosts that fail to adhere to the MAC protocol may obtain an unfair throughput share. For example, IEEE 802.11 requires hosts competing for access to the channel to wait for a "backoff" interval, randomly selected from a specified range/before initiating a transmission. Selfish hosts may wait for smaller backoff intervals than well-behaved hosts, thereby obtaining an unfair advantage. We present modifications to the IEEE 802.11 protocol to simplify detection of such selfish hosts and analyze the optimality of the chosen strategy. We also present a penalty scheme for punishing selfish misbehavior. We develop two misbehavior models to capture the behavior of misbehaving hosts. Simulation results under these misbehavior models indicate that our detection and penalty schemes are successful in handling MAC layer misbehavior.