A transceiver that senses / analyzes its radio environment and changes its transmission/ reception parameters to communicate efficiently by avoiding interference with other frequency users in its operational areas is known as cognitive radio.
Traditional radios work without analyzing radio environment and operate on a specific frequency. Cognitive Radio will operate in the unused portion of frequency thereby increasing efficiency of the frequency spectrum. Cognitive Radio is built on Software Defined Radio (SDR) Technology.
An SDR is a radio communication system where components that have typicall been implemented in hardware (e.g. mixers, filters, amplifiers, modulators/demodulators etc.) are instead implemented by means of a software on a computer.
Cognitive radio is actually an intelligent system that looks to exploit unused parts of the radio spectrum, hence improving spectrum efficiency. It is a technology of the future and research is still going on in the world in this particular field.