Keywords: online platforms, data acquisition, privacy-aware agents, differential privacy, endogenous participation
TL;DR: We study an online platform that aims to incentivize participation of and collect data from privacy-aware agents. The platform does so without payments by offering instead a service trained on agent data, while guaranteeing differential privacy.
Abstract: We study the problem faced by a data analyst or platform that wishes to collect private data from privacy-aware agents. To incentivize participation, in exchange for this data, the platform provides a service to the agents in the form of a statistic computed using all agents' submitted data. The agents decide whether to join the platform (and truthfully reveal their data) or not participate by considering both the privacy costs of joining and the benefit they get from obtaining the statistic. The platform must ensure the statistic is computed differentially privately and chooses a central level of noise to add to the computation, but can also induce personalized privacy levels (or costs) by giving different weights to different agents in the computation as a function of their heterogeneous privacy preferences (which are known to the platform). We assume the platform aims to optimize the accuracy of the statistic, and must pick the privacy level of each agent to trade-off between i) incentivizing more participation and ii) adding less noise to the estimate. We provide a semi-closed form characterization of the optimal choice of agent weights for the platform in two variants of our model. In both of these models, we identify a common nontrivial structure in the platform's optimal solution: an instance-specific number of agents with the least stringent privacy requirements are pooled together and given the same weight, while the weights of the remaining agents decrease as a function of the strength of their privacy requirement. We also provide algorithmic results on how to find the optimal value of the noise parameter used by the platform and of the weights given to the agents.