TWC SBE: Small: Towards an Economic Foundation of Privacy-Preserving Data Analytics: Incentive Mechanisms and Fundamental Limits

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The commoditization of private data has been trending up, as big data analytics is playing a more critical role in advertising, scientific research, etc. It is becoming increasingly difficult to know how data may be used, or to retain control over data about oneself. One common practice of collecting private data is based on "informed consent", where data subjects (individuals) decide whether to report data or not, based upon who is collecting the data, what data is collected, and how the data will be used. This model is becoming untenable, with vague privacy policies and a behind-the-scenes data brokerage market becoming the norm. In practice, there are two fundamental issues that need to be addressed: (i) data subjects have no control of data privacy after transferring private data to the data collector; and (ii) the data collector has sole ability to protect users' private data. This project takes a new, market-based approach: data subjects control their own data privacy by reporting noisy data, and data collectors provide incentives in exchange for receiving more accurate data. This research will enable a paradigm shift from the traditional practice of informed consent for private data collection to a market-based approach where data collectors have only the fidelity of data needed, reducing the potential damage from data breach and giving data subjects greater control over use of their private data.In particular, the problem under consideration is studied in a game-theoretic setting, for general private data models and for a variety of privacy notions, with focus on quantifying two fundamental tradeoffs: the tradeoff between cost and accuracy from the data collector's perspective, and the tradeoff between reward and privacy from a data subject's perspective. The research tasks include (i) devising effective incentive mechanisms for data collectors to collect quality data (controlled by individuals) with minimum cost; and (ii) developing private-preserving reporting algorithms that maximize data subjects' payoffs by taking both payment and privacy loss into account. New theories and mechanisms developed in this project will be integrated into undergraduate and graduate courses.More information about this project can be found at the project homepage http://inlab.lab.asu.edu/data-privacy/