Dynamic Pricing Incentive for
Participatory Sensing
Juong-Sik Lee and Baik Hoh
Nokia Research
Pervasive and Mobile Computing 2010
Introduction
• Dynamic return of investment (ROI) of
participatory sensing applications (different data
types, users’ context, etc)
• Fixed price incentives may not work well; further,
it’s hard to come up with an optimal price
• Reverse auction: users bid for selling their data,
and the buyer selects a predefined number of
lower bit price users
– Selling price dynamically changes
Reverse Auction
• A user’s utility: U(b) = (b-t)*p(b)
– b: received credit
– t: base value of the data (that a user think)
– p(b): winning probability
Problems with Reverse Auction
• Lost users may drop out of the system
• Incentive cost explosion happens when a system has
below a threshold number users (here, m)
– Those users can increase their bid as much as possible
• Solution: for each loss, buyer gives virtual participation
credit (of fixed amount α); credit cumulates over time
– Seller can use the credit to lower its bid (thus, increasing
winning probability)
BID
Incentive cost explosion
winners
losers
Give “virtual credit” α
to losers
Credit-based Incentives
Summary
• Random Selection based Fixed Pricing (RSFP):
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(+)Simple to implement
(+) Easy to predict total incentive cost
(-) Difficult optimal incentive price decision
(-) Unable to adapt to dynamic environments
• Reverse auction dynamic pricing w/ virtual credit (RADP-VPC)
–
–
–
–
–
–
(+) Eliminate complexity of incentive price decision
(+) Able to adapt to dynamic environments
(+) Minimize incentive cost
(+) Better fairness of incentive distribution
(+) Higher social welfare
(-) Relatively harder to implement than RSFP
Evaluation Model
• ROI till round r = [earning so far] / [# of
participation till round r]*[min reward]
• If ROI(r) drops below 0.5, a user drops out of
the system
• Evaluation items
– Incentive cost reduction
– Fairness against true valuation
– Service quality
– Optimal virtual participation credit
Incentive Cost Comparison
Incentive Cost Reduction
Reverse auction dynamic pricing
with virtual participation credit
(RADP-VPC)
Fairness Against True Valuation
Service Quality Guarantee