A Mobile Ad hoc Network (MANET) is a self-configuring network of mobile nodes and is connected by wireless links. In MANET, cooperation of nodes for transmitting packets from source to destination cannot be assumed because of the nodes selfishness and misbehavior degrades the performance of the network makes difficult in finding the routes between the nodes. Cooperation among the nodes can enhance by providing incentives and malicious nodes can eliminate by neighborhood watch are the proposed solutions. A pricing approach which is based on an auction structure is used to obtain the least cost route and after finding the required route, the misbehaving nodes should be isolated, thus making it unattractive to deny cooperation. The proposed scheme is simulated using NS2 and the results show the improved performance.