SWDPM: A Social Welfare-Optimized Data Pricing Mechanism

• URL: http://arxiv.org/abs/2305.06357v1
• Date: Mon, 8 May 2023 02:25:35 GMT
• Title: SWDPM: A Social Welfare-Optimized Data Pricing Mechanism
• Authors: Yi Yu, Shengyue Yao, Juanjuan Li, Fei-Yue Wang, Yilun Lin
• Abstract summary: We propose a novel approach to modeling multi-round data trading with progressively disclosed information. We introduce a Social Welfare-optimized Data Pricing Mechanism (SWDPM) to find optimal pricing strategies. Numerical experiments demonstrate that the SWDPM can increase social welfare 3 times by up to 54% in trading feasibility.
• Score: 21.487641773601737
• License: http://arxiv.org/licenses/nonexclusive-distrib/1.0/
• Abstract: Data trading has been hindered by privacy concerns associated with user-owned data and the infinite reproducibility of data, making it challenging for data owners to retain exclusive rights over their data once it has been disclosed. Traditional data pricing models relied on uniform pricing or subscription-based models. However, with the development of Privacy-Preserving Computing techniques, the market can now protect the privacy and complete transactions using progressively disclosed information, which creates a technical foundation for generating greater social welfare through data usage. In this study, we propose a novel approach to modeling multi-round data trading with progressively disclosed information using a matchmaking-based Markov Decision Process (MDP) and introduce a Social Welfare-optimized Data Pricing Mechanism (SWDPM) to find optimal pricing strategies. To the best of our knowledge, this is the first study to model multi-round data trading with progressively disclosed information. Numerical experiments demonstrate that the SWDPM can increase social welfare 3 times by up to 54\% in trading feasibility, 43\% in trading efficiency, and 25\% in trading fairness by encouraging better matching of demand and price negotiation among traders.

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