=Paper=
{{Paper
|id=Vol-2311/paper_15
|storemode=property
|title=How to Balance Privacy and Money through Pricing Mechanism in Personal Data Market
|pdfUrl=https://ceur-ws.org/Vol-2311/paper_15.pdf
|volume=Vol-2311
|authors=Rachana Nget,Yang Cao,Masatoshi Yoshikawa
|dblpUrl=https://dblp.org/rec/conf/sigir/NgetCY17
}}
==How to Balance Privacy and Money through Pricing Mechanism in Personal Data Market==
How to Balance Privacy and Money through Pricing Mechanism in Personal Data Market Rachana Nget Yang Cao Masatoshi Yoshikawa Kyoto University Emory University Kyoto University Kyoto, Japan Atlanta, Georgia, USA Kyoto, Japan rachana.nget@db.soc.i.kyoto-u.ac.jp ycao31@emory.edu yoshikawa@i.kyoto-u.ac.jp ABSTRACT are extraordinarily valuable for the public and private sector to In the big data era, personal data is, recently, perceived as a new improve their products or services. However, personal data reflect oil or currency in the digital world. Both public and private sectors the unique value and identity of each individual; therefore, the wish to use such data for studies and businesses. However, access to access to personal data is highly restricted. For this reason, some such data is restricted due to privacy issues. Seeing the commercial large Internet companies and social network services provide free opportunities in gaps between demand and supply, the notion of services in exchange for their users’ personal data. Demand for per- personal data market is introduced. While there are several chal- sonal data for research and business purposes excessively increases lenges associated with rendering such a market operational, we while there is practically no safe and efficient supply of personal focus on two main technical challenges: (1) How should personal data. Seeing the commercial opportunities rooted in gaps between data be fairly traded under a similar e-commerce platform? (2) How demand and supply, the notion of personal data market is intro- much should personal data be worth in trade? duced. This notion has transformed perceptions of personal data In this paper, we propose a practical personal data trading frame- as an undisclosed type to a commodity, as noted in [4] and [11]. To work that strikes a balance between money and privacy. To acquire perceive personal data as a commodity, many scholars, such as [6], insight on user preferences, we first conduct an online survey on [12], [13], and [14], have asserted that a monetary compensation human attitude toward privacy and interest in personal data trad- should be given to real data producers/owners for their privacy ing. Second, we identify five key principles of the personal data loss whenever their data are accessed. Thus, personal data could be trading central to designing a reasonable trading framework and traded under the form of e-commerce where buying, selling, and pricing mechanism. Third, we propose a reasonable trading frame- financial transaction are done online. However, this type of com- work for personal data, which provides an overview of how data modity might be associated with private attributes, so it should not are traded. Fourth, we propose a balanced pricing mechanism that be classified as one of the three conventional types of e-commerce computes the query price and perturbed results for data buyers and goods (i.e., physical goods, digital goods, and services, as noted compensation for data owners (whose data are used) as a function in [9]). This privacy attribute introduces a number of challenges of their privacy loss. Finally, we conduct an experiment on our bal- and requires different trading approach for this commodity called anced pricing mechanism, and the result shows that our balanced personal data. How much money should data buyers pay, and how pricing mechanism performs significantly better than the baseline much money should data owners require for their privacy loss from mechanism. information derived from their personal data? One possible way is to assign the price in corresponding to the amount of privacy CCS CONCEPTS loss, but how to quantify privacy loss and how much money to be compensated for a metric of privacy loss are the radical challenges • Security and privacy → Economics of security and privacy; in this market. Usability in security and privacy; KEYWORDS 1.1 Personal Data Market Query pricing; Personalized Differential Privacy; Personal data mar- The personal data market is a sound platform for securing the ket personal data trading. What is traded as defined in [12] is a noisy version of statistical data. It is an aggregated query answer, derived 1 INTRODUCTION from users’ personal data, with some random noise included to Personal data is, recently, perceived as a new oil or currency in guarantee the privacy of data owners. The injection of random noise the digital world. A massive volume of personal data is constantly is referred to as perturbation. The magnitude of perturbation directly produced and collected every second (i.e., via smart devices, search impacts the query price and amount of data owners’ privacy loss. A engines, sensors, social network services, etc.). These personal data higher query price typically yields a lower degree of perturbation (less noise injection). Copyright © 2017 by the paper’s authors. Copying permitted for private and academic In observing the published results of true statistical data, an purposes. adversary with some background knowledge (i.e., sex, birth date, In: J. Degenhardt, S. Kallumadi, M. de Rijke, L. Si, A. Trotman, Y. Xu (eds.): Proceedings of the SIGIR 2017 eCom workshop, August 2017, Tokyo, Japan, published zip code, etc.) on an individual in the dataset can perform linkage at http://ceur-ws.org attacks to identify whether that person is included in the results. For instance, published anonymized medical encounter data were once matched with voter registration records (i.e., birth date, sex, SIGIR 2017 eCom, August 2017, Tokyo, JAPAN Rachana Nget, Yang Cao, Masatoshi Yoshikawa zip code, etc.) to identify the medical records of the governor of Mas- and buyers must negotiate the prices on their own, which may not sachussetts, as explained in [3]. Therefore, statistical results should be efficient because not all data owners know or truthfully report be subjected to perturbation prior to publication to guarantee an the price of their data. This can result in an obstruction of trading absence of data linkages. operations. Based on lessons learned from such start-ups, we can As is shown in Figure 1, three main participants are involved: conclude what they are missing is a well-designed trading frame- data owners, data seekers/buyers, and market maker. Data owners work, that explains the principles of trading, and pricing mechanism, contribute their personal data and receive appropriate monetary that balances the money and privacy traded in the market. compensation. Data buyers pay a certain amount of money to obtain To make this market operational, there are many challenges their desirable noisy statistical data. Market maker is a trusted from all disciplines, but we narrow down fundamental technical mediator between the two key players, as no direct trading occurs challenges to two factors: between two parties. A market maker is entrusted to compute a • Trading framework for personal data: How should per- query answer, calculate query price for buyers and compensation sonal data be fairly traded? In other words, how should a rea- for owners, and most importantly design a variety of payment sonable trading framework be designed to respectively prevent schemes for owners to choose from. circumvention from buyers on arbitrage pricing and from data owners on untruthful privacy valuation? • Balanced pricing mechanism: How much should personal data be worth? How should a price that balances data owners’ privacy loss and buyers’ payment be computed? This balance is crucial in convincing data owners and data buyers to participate in the personal data market. Figure 1: How much is personal data worth? 1.2 Contribution The personal data market could be considered as the integration To address the above challenges more precisely, we first conducted of Consumer-to-Business (C2B) and Business-to-Consumer (B2C) a survey on human attitudes toward privacy and interest in per- or Business-to-Business (B2B) e-commerce. On one side of the sonal data trading (Section 2). Second, from our survey analysis and trading, the data owners as individuals provide their personal data from previous studies, we identify five key principles of personal to the market as is done in (C2B) e-commerce, though, at this point, data trading (Section 3.1). Third, we propose a reasonable trading no trading is done. On another end of the framework, the market framework (Section 3.2) that provides an overview of how data maker sells statistical information to data buyers as an individual are traded and of transactions made before, during, and after trade or company which is similar to (B2C) and (B2B) trading. This is occurs. Fourth, we propose a balanced pricing mechanism (Section when the trading transactions are completed in this framework. The 4) that computes the price of a noisy aggregated query answer study of such a market framework could initiate a new perception and that calculates the amount of compensation given to each data on the new forms of e-commerce. owner (whose data are used) based on his or her actual privacy loss. The existence of personal data market will make abundance of The main goal is to balance the benefits and expenses of both data personal data including sensitive but useful data safely available owners and buyers. This issue has not been addressed in previous for various uses, giving rise to many sophisticated developments researches. For instance, a theoretical pricing mechanism [12] has and innovations. For this reason, several start-up companies have been designed in favor of data buyers only. Their mechanism em- developed online personal data trading sites and mobile applica- powers buyer to determine the privacy loss of data owners while tions following this market orientation. These sites are Personal 1 , assuming that data owners can accept an infinite privacy loss. In- and Datacoup2 , which aim at creating personal data vaults. They stead, our mechanism will empower both data owners and buyers buy the raw personal data from each data owner and compensate to fully control their own benefits and expenses. Finally, we conduct them accordingly. However, some data owners are not convinced an experiment on a survey dataset to simulate the results of our to sell their raw data (without perturbation). For Datacoup, pay- mechanism and prove the efficiency of our mechanism relative to a ment is fixed at approximately $8 for SNS and financial data (i.e., baseline pricing mechanism (Section 5). credit/debit card transactions). It is questionable whether $8 is rea- sonable compensation, and how this price was decided. Another 2 SURVEY RESULT source of inefficiency is related to the absence of data buyers. This To develop deeper insight into personal data trading and to collect can create problems if buyers are not interested in such types of data for our experiment, we conducted an online survey delivered collected data. In addition, CitizenMe and digi.me recently launched through a crowdsourcing platform. In total, 486 respondents from personal data collection mobile applications that help data owners 46 different states throughout the USA took part in the survey. collect and store all of their personal data in their devices. Although The respondents were aged 14 to older than 54 and had varying the framework connects buyers to data owners, it might be ineffi- education backgrounds, occupations, and incomes. For our survey, cient and impractical for buyers to buy individual raw data one at respondents were required to answer 11 questions. Due to space a time. Moreover, as no pricing mechanism is offered, data owners limitations, We only discuss the more significant questions posed. 1 www.personal.com Analysis 1: For four types of personal data: Type 1 (commute 2 www.datacoup.com type to school/work), Type 2 (yearly income), Type 3 (yearly expense How to Balance Privacy and Money through Pricing Mechanism SIGIR 2017 eCom, August 2017, Tokyo, JAPAN on medical care), Type 4 (bank service you’re using), the following results were obtained. (a) Alteration levels on data. (b) Payment schemes. Figure 4: Preferences in privacy and money. (a) Can sell Vs. Cannot sell. (b) How much to sell. Privacy protection levels and desired payment schemes varied in Figure 2: Types of data to sell/not to sell. between the data considered and among the respondents. In prac- tice, people harbor different attitudes toward privacy and money. More than 50% of the respondents said they cannot sell the data Thus, it is crucial to allow a personalized privacy level and payment (see Figure 2a), and more than 50% of those who can sell said that scheme for each individual. they do not know how much to sell (see Figure 2b). Analysis 4: Among the four given criteria to decide when selling Most of the participants stated that they do not know how much personal data: usage (who and how buyers will use your data), their data are worth, highlighting one of the above mentioned chal- sensitivity (sensitivity of data, i.e., salary, disease, etc.), risks (future lenges related to the personal data market. Similarly, [1] noted that risks/impacts), and money (to obtain as much money as possible), it is very difficult for data owners to articulate the exact valuation In descending order, the participants valued the following: who of their data. and how the data will be used, sensitivity, future risks/impacts, and Analysis 2: When asked to sell their anonymized personal data, money (see Figure 5). 49% of respondents said It depends on type of personal data and amount of money, 35% were Not interested, and 16% were Interested (see Figure 3a). However, if providing more privacy protection by both anonymizing and altering (perturbing) real data, more than 50% of the respondents became interested in selling, meaning that more people are now convinced to sell their data under such conditions. (see Figure 3b). Figure 5: Importance of criteria when selling personal data. Money is considered the least important criterion, while who and how data will be used is considered the most important one when deciding to sell personal data. This implies that money cannot buy everything when the seller does not want to sell. 3 TRADING FRAMEWORK (a) Interest in selling anonymized data. (b) Interest in selling both anonymized and altered data. All notations used in this study are summarized in Table 1. Figure 3: Interest in selling personal data. 3.1 Key Principles of the Trading Framework Anonymization does not convince people to sell their personal To design a reasonable trading framework and a balanced pricing data. Providing extra privacy protection via data alteration or per- mechanism, it is important to determine the chief principles of the turbation on the anonymized data might make them feel more personal data trading framework. These key principles are derived convinced and safer to sell their data. from previous studies and from the four key analyses of our survey. Analysis 3: With regard to alteration/perturbation, the respon- The principles are categorized into five different groups: personal- dents were asked to select their preferred privacy level: {very low, ized differential privacy as a privacy protection, applicable query low, high, very high}, in other words, how much they want to al- type, arbitrage-free pricing model, truthful privacy valuation, and ter/perturb their real data. A very low level of alteration (low noise unbiased result. To guarantee the data owner’s privacy, personal- injection) denotes a low privacy protection, but more monetary ized differential privacy injects some randomness into the result compensation. As a result (see Figure 4a), alteration levels were based on the preferred privacy level. It is also used as a metric to found to vary across the four types of data. Similarly, the preferred quantify the privacy loss of each data owner. With this personalized payment schemes (see Figure 4b) varied throughout all the data differential privacy guarantee, only some certain linear aggregated types. A human-centric study [18] also showed that people value query types are applicable in this trading framework. Regarding different categories of data differently according to their behaviors pricing, a pricing model should be arbitrage-free and must not al- and intentional levels of self-disclosure; as a result, location data low any circumventions on the query price from any savvy buyers. are valued more highly than communication, app, and media data. Similarly, such a framework should be designed to encourage data SIGIR 2017 eCom, August 2017, Tokyo, JAPAN Rachana Nget, Yang Cao, Masatoshi Yoshikawa Table 1: Summary of notations. Notation Description [8], which is derived from the above differential privacy. Each user ui , b j Data owner i, Data buyer j can personalize his or her maximum tolerable privacy level/loss xi Data element of ui εˆi , so any private mechanisms that satisfy εˆi -differential privacy εˆi Maximum tolerable privacy loss of ui must guarantee each user’s privacy up to their εˆi . Users may set wi Payment scheme of ui εˆi according to their privacy attitude with the assumption that εˆi εi Actual privacy loss of ui in query computation is public and is not correlated with the sensitivity of data. This w i (εi ) Compensation to ui for losing εi theory thus allows users’ privacy personalization while offering x Dataset consisting of a data element of all ui more utility to data buyers. Q Linear aggregated query requested by the buyer Wmax Maximum budget of the buyer Definition 3.2 (Personalized Differential Privacy [8]). Regarding Wp ,Wr Query price, Remaining budget of the buyer the maximum tolerable privacy loss εˆ of each user and a universe Q(x) True query answer of users U , a randomized mechanism M : D → R satisfies ε- ˆ P(Q(x)) Perturbed query answer (with noise) Personalized Differential Privacy (or ε-PDP), ˆ if for every pair of RMSE Root mean squared error neighboring datasets x, y ∈ D where x and y differs in data for user χ Market maker’s profit i, and for any set of S ⊆ Ranдe(M), Wab Available budget for query computation Pr(M(x) ∈ S) ≤ exp(ε) ˆ ∗ Pr(M(y) ∈ S) (2) RS A representative sample of dataset x h Number of representative samples RS Both DP and PDP are theories, so a private mechanism is em- Φ Number of perturbation run times ployed to realize these theories. [8] introduced two PDP private mechanisms: sampling and exponential-like mechanisms. Given a owners’ truthful privacy valuation by providing them the right privacy threshold, the sampling mechanism samples a subset drawn pricing scheme so that they will not benefit from any untruthful from the dataset and then runs one of the private mechanisms (i.e., valuation. Finally, it is important to ensure the generation of unbi- Laplace mechanism, etc.). The exponential-like mechanism, given ased/less biased query result without increasing query price, so a a set of ε, ˆ computes a score (probability) for each potential element careful sample selection method is crucial. in the output domain. This score is inversely related to the number of changes made in a dataset x required for a potential value to A. Personalized Differential Privacy as a Privacy become the true answer. Protection Definition 3.3 (Score Function [8]). Given a function f : D → R The pricing mechanism should be capable of preserving data owner’s and outputs r ∈ Ranдe(f ) with a probability proportional to that privacy from any undesirable privacy leakages. To ensure privacy, of the exponential mechanism differential privacy [3], s(D, r ) is differential privacy [3] plays an essential role in guaranteeing that a real-valued score function. The higher the score, the better r is the adversary could learn nothing about an individual while learn- relative to f (D). Assuming that D and D ′ differ only in the value ing useful information about the whole population/dataset from of a tuple, denoted as D ⊕ D ′ , observing the query result (despite some background knowledge s(D, r ) = max − |D ⊕ D ′ | (3) about that individual). Given a privacy parameter ε, any private f (D ′ )=r mechanisms (i.e., Laplace mechanism, Exponential mechanism, etc.) satisfy the ε-differential privacy level if the same result is likely to In PDP, each record or data owner has their own privacy setting occur regardless of the presence or absence of any individual in εˆi , so it is important to distinguish between different D ′ that make the dataset as a result of random noise addition. A smaller ε offers a specific value to become the output. To formalize this mechanism, better privacy protection but is less accurate, resulting in a tradeoff [8] defined it as follows. between privacy and result accuracy. In our framework, we define Definition 3.4 (P E Mechanism [8]). Given a function f : D → R, ε as the quantification of privacy loss of data owner as ε and money an arbitrary input dataset D ⊂ D , and a privacy specification ϕ, the are correlated. f mechanism P E ϕ (D) outputs r ∈ R with probability Definition 3.1 (ε-Differential Privacy [3]). A random algorithm M : D → R satisfies ε-Differential Privacy (ε-DP) if the neighboring 1 dataset x, y ∈ D where D is a whole dataset and dataset x and y exp( d f (D, r, ϕ)) f Pr [P E ϕ (D) = r ] = 2 (4) differs by only one record, and any set of S ⊆ Ranдe(M), 1 q ∈R exp( d f (D, r , ϕ)) Í Pr(M(x) ∈ S) ≤ exp(ε) ∗ Pr(M(y) ∈ S) (1) 2 where d f (D, r, ϕ) = max Í i ′ −ϕ u In regard to differential privacy (DP), privacy protection is for i ∈D ⊕D f (D ′ )=r the tuple level, which means that all users included in the dataset have the same privacy protection/loss ε value (one for all). How- In our framework, ϕ refers to a set of maximum tolerable privacy ever, in practice, individuals may have different privacy attitude, loss εˆi of all data owners in the dataset x. We apply this P E mech- as illustrated in our survey result, so allowing privacy personal- anism to guarantee that each data owner’s privacy is protected ization is considered critical, especially in the trading setting. We despite data owners having different privacy requirements. The thus adopt the personalized differential privacy (PDP) theory by proof of this mechanism can be found in [8]. How to Balance Privacy and Money through Pricing Mechanism SIGIR 2017 eCom, August 2017, Tokyo, JAPAN B. Applicable Query Type query buyers can request, so our framework allows buyers to ask With background knowledge, the adversary may engage in linkage any linear aggregated queries but only once per query. attacks on the published query answer and may eventually identify an individual from this answer. Therefore, any queries answered in D. Truthful Privacy Valuation this trading framework should guarantee that results do not reveal Untruthful privacy valuation is an undesirable property leading to whether or not an individual is answering the query. DP or PDP the generation of unacceptably high query prices. Without carefully can prevent the data linkage attacks on the published results of designed payment schemes, some savvy data owners will always statistical/linear aggregated queries by introducing randomness. attempt to select any schemes that provide them more benefits, For these reasons, only statistical/linear aggregated queries should so they may intentionally report an unreasonably high privacy be allowed in the trading framework when the privacy is guaranteed valuation. For instance, [12] applied a linear payment scheme (w i = by DP or PDP. [12] also adopted this query type in their proposed c i ∗ ε) and allowed each data owner to define the c i . With the same theoretical framework. ε, most data owners will always set very high c i values to maximize Definition 3.5 (Linear Query [12]). Linear Query is a vector with benefits. real value q = (q 1 , q 2 , ..., qn ). The computation of this query q on To encourage truthful privacy valuation, all data owners shall be a fixed-size data vector x is the result of a vector product q.x = provided with the suitable payment scheme corresponding to their q 1 .x 1 + ... + qn .x n . privacy/risk attitudes so that untruthful valuations do not increase their benefits, as illustrated [2]. C. Arbitrage-free Pricing Model Arbitrage-free is a requisite property used to combat the circum- vention of a savvy data buyer on the query price. For instance, a perturbed query answer with a larger ε 1 = 1 costs $10 and that with a smaller ε 2 = 0.1 costs $0.1. If a savvy buyer seeks a perturbed query answer with ε = 1, he or she will buy the query answer with ε 2 = 0.1 10 times to compute the average of them for the same result as ε 1 = 1 because ε increases as the number of computation times n increases ε = (n ∗ ε 2 ). This case is explained based on composition theorems in [3]. Therefore, the buyer will never have to pay $10 for the same result as the average of several cheap queries costing him/her only $1. In [12], the arbitrage-free property is defined as Figure 6: Payment Schemes. follows: Proposition 3.7 (Payment Scheme). A payment scheme is a Definition 3.6 (Arbitrage-free [12]). A pricing function π (Q) is non-decreasing function w : ε → R + representing a promise between arbitrage-free if for every multiset S = Q 1 , ..., Qm and Q can be a market maker and a data owner on how much data owner should determined from S, denoted as S → Q, then: be compensated for their actual privacy loss εi . Any non-decreasing m functions can be denoted as payment schemes. For instance, • Type A: This Logarithm function is designed to favor conser- Õ π (Q) ≤ π (Q i ) (5) i=1 vative (low-risk, low-return) data owners whose εˆ is small. An explanation and discussion of query determinacy (S → Q) loд(30) ∗ ln(9000ε + 1) w= (6) can be found in [12]. 130 Arbitrage-free pricing function: [12] proved that a pricing function • Type B: This Sublinear function is designed to favor liberal π (Q) can be made equal to the sum of all payments made to data (high-risk, high-return) data owners whose εˆ is large. owners if the framework is balanced. A framework is balanced if: (1) the pricing function π and payment function to data owners w= √ 8ε (7) are arbitrage-free, and (2) the query price is cost-recovering, which 1100 + 500ε 2 means that the query price should not be less than that needed to compensate all data owners. In our framework, we simply adopt For our framework, we designed two different types of payment their arbitrage-free property by ensuring that the query price Wq schemes, as illustrated in Figure 6. The data owner shall select a is always greater than the compensation given to all data owners payment scheme based on his or her privacy εˆ or risk orientation. (whose data are accessed) for their actual privacy loss εi . Therefore, there is no reason for data owners to untruthfully report For simplicity, a buyer shall not be able to request the same their privacy valuation εˆ because doing so would not provide them query more than once because each data owner has his or her with any benefits. The market maker designs a pricing scheme, own εˆi , so we must guarantee that their privacy loss is no greater and the guidelines of a design should mainly depend on equilib- than their specified εˆi . Alternatively, market maker can predefine rium theory of the supply and demand. In the present study, we the sets of queries that buyer can ask for so that they can study only consider two types of functions to provide different options relationships between all queries in advance to prevent arbitrage for conservative and liberal data owners. We will develop a more problems from emerging. However, this also limits the choice of sophisticated scheme in our future work. SIGIR 2017 eCom, August 2017, Tokyo, JAPAN Rachana Nget, Yang Cao, Masatoshi Yoshikawa E. Unbiased Result is a real non-negative value that is difficult to determine to obtain Besides ensuring privacy protection and price optimization, unbi- an exact level of utility. However, [7] conducted a study on an eco- ased result has been a crucial factor in trading. Buyers do not want nomic method of setting ε. Thus, a good user interface is assumed to obtain a result that is biased or that is significantly different from to help data owners understand and determine their εˆi . the true result, so it is important to ensure the generation of an Data buyer purchases an aggregated query answer from the unbiased result. market maker by specifying a query Q and a maximum budget In our setting, we guarantee the generation of an unbiased/less Wmax . Rather than asking the buyer to specify the variance in the biased result by randomly selecting data owners, among which query answer, as in [12], we design our mechanism to be able to both liberal and conservative data owners are equally likely to be obtain the most optimal result with the least noise/errors within selected. Employing the PDP assumption, data owner’s εˆi value is the given budget Wmax , since data buyers are highly unlikely to not correlated with the sensitivity of data, so random selection best know which value of variance to specify to obtain their desired guarantees a less biased result. utility within a limited budget. Thus, designing a mechanism to Moreover, to optimize the query price, it is necessary to select tackle this issue helps buyers and market maker. a representative sample from a dataset because paying each indi- Our framework works as follows. Data owner ui (x i , εˆi , w i ), i ∈ vidual data owner in the dataset (as in [12]) leads to the generation [1, n] sells his/her data element x i by demanding that the actual of very high query prices for the same level of data utility. Thus, privacy loss εi must not be greater than their specified εˆi while sampling a good representative subset is very useful. We apply payment should correspond to their selected payment scheme w i . statistical sampling method to compute the number of data owners These data elements are stored by a trusted market maker. In the pre- required for each representative sample given a dataset. A similar trading stage, the data buyer issues a purchase request by specifying concept is employed in [2]. his Q and Wmax . With the request, the market maker will run a A personal data trading framework should adopt these five key simulation and generate a price menu (see Table 2) with an average principles to avoid certain issues and to obtain more optimal results. privacy loss ε and a sample size corresponding to prices for the However, a similar study by [12] did not consider all of these key buyer. This price menu provides an overview of the approximate principles. First, data owners cannot personalize their privacy levels level of utility the buyer may receive for each price. as they are assumed to accept infinite losses when more money is Table 2: Example of a price menu. paid. Moreover, their mechanism cannot efficiently reduce query Price ($) Average privacy loss ε Sample size prices because a query is computed on the entire dataset, and data 5 0.039 384 owners can easily untruthfully report their privacy valuation to 50 0.545 384 maximize the amount of payment given a linear payment scheme. 100 0.619 698 3.2 Personal Data Trading Framework The buyer reviews the ε and determines the amount of money he To balance data owners’ privacy loss and data buyer’s payment to is willing to pay. Once the market maker is notified of the purchase guarantee a fair trade, we propose a personal data trading frame- decision, he will run the pricing mechanism (described in Section 4) work (see Figure 7) that involves three main participants: market to select a number of representative samples RS from the dataset x maker, data owner, and data buyer. and then conduct a query computation by perturbing the answer to ensure the privacy guarantee for all data owners whose data were accessed. Next, the market maker distributes the payment to the data owners in the selected sample RS and returns the perturbed query answer P(Q(x)), the remaining budget Wr , the size of RS, and the root mean squared error RMSE in the query answer. Note that the transaction aborts when the market maker cannot meet their requirements simultaneously. 4 PRICING MECHANISM Figure 7: Trading framework for personal data. The pricing mechanism directs price and query computations for Market maker is a mediator between the data buyer and data data buyers and compensation computation for data owners whose owner. Market maker has some coordinating roles. First, market data have been accessed. A specially designed pricing mechanism is maker serves as a trusted server that answers data buyer’s query required in this personal data market because information derived by accessing the data elements of data owners. Second, a market from personal data, unlike other types of physical goods, does not maker computes and distributes payment to data owners whose have any tangible properties. Thus, it is difficult to set a price or data have been accessed while keeping a small cut of the price as a calculate the traded value as asserted in [16]. Similarly, [1] and profit χ . Third, a market maker devises some payment schemes for [15] discussed why some conventional pricing models (i.e., the data owners to choose from. Our pricing mechanism is designed to cost-based pricing and competition-based pricing models) are not assist the market maker with his or her tasks. able to price digitalized goods such as data and information. As Data owner sells his/her data element x i by selecting the max- noted in [17], the only feasible pricing model is the value-based imum tolerable privacy loss εˆi and payment scheme w i . In DP, ε pricing model, through which the price is set based on the value that How to Balance Privacy and Money through Pricing Mechanism SIGIR 2017 eCom, August 2017, Tokyo, JAPAN the buyer perceives. In our framework, the utility of query results Algorithm 2: Compute query price and compensation for all determines the price, and this utility is significantly associated with h subsets each data owner’s level of privacy loss. Input: x, (RS 1 , RS 2 , ..., RSh ), Wmax , χ , h, and Φ Output: Wp , Wr , and (w 1 , w 2 , ..., w h ) 4.1 Baseline Pricing Mechanism 1 Wab ← Wmax − χ ; To simply compute the query price, compensation, and perturbed 2 while While h>0 do query result, the baseline pricing mechanism does not involve a 3 j ← |RSh |; sampling procedure. It basically utilizes the entire dataset x in com- 4 Íj Wp ← { i=0 w ui ∈RSh (εˆui ∈RSh )|i ∈ [0, j − 1]}; putations to ensure the generation of an unbiased result. In addition, 5 if Wp ≤ Wab then the baseline pricing mechanism implements a simple personalized 6 while While j< |x |&& Wp < Wab do differentially private mechanism known as the Minimum mech- 7 Wr ← Wab − Wp ; anism [8], which satisfies εˆi -PDP by injecting the random noise 8 RSh ← {uk |U ndupRandomize(1, |x |)}; X drawn from a Laplace distribution with a scale b, denoted as (X ∼ Lap(b)), where b = 1/Min(εˆ1 , εˆ2 , ..., εˆn ). The computational 9 j ← j + 1; run-time of this mechanism is much shorter than that of the sophis- 10 if W r > w uk ∈x (εˆuk ∈x ) then ticated balanced pricing mechanism, yet it generates a higher query 11 Wp ← Wp + w uk ∈x (εˆuk ∈x ); price for a result with more noise. This mechanism does not con- 12 ε uk ∈x ← εˆuk ∈x ; sider a sophisticated allocation of compensation and perturbation, 13 else so it just compensates all data owners ui ∈ x for the same privacy 14 Wp ← Wp + Wr ; loss εˆmin and satisfies all ui ∈ x with the minimum privacy loss 15 w uk ∈x ← Wr ; εˆmin resulting in a very low utility (with more noise). For a better 16 ε uk ∈x ← (w uk ∈x )−1 ; result, we propose a balanced pricing mechanism that takes into 17 end account the weak performance of the baseline pricing mechanism. 18 end 19 Wr ← Wab − Wp ; 4.2 Balanced Pricing Mechanism 20 else In the balanced pricing mechanism, computations are conducted 21 lsT emp ← RSh ; through the use of three main algorithms: (1) sample h subsets of 22 payment ← 0; data owners, (2) compute the query price and compensation for all 23 Wr ← 0; h subsets, and (3) perturb the query answer for all h subsets and Wab then select an optimal subset. 24 Weq ← ; |lsT emp| Algorithm 1 samples h subsets of data owners. It computes the 25 do size of an RS representative sample of a dataset x using the sta- 26 lsU nderPaid ← 0; tistical method given a dataset x, a confidence level score CLS, a 27 foreach ui ∈ lsT emp do distribution of the selection DT , and a margin of error MER. Then, 28 if w ui (εˆui ) ≤ Weq then the mechanism randomly selects different/not-duplicated data own- 29 ε ui ← εˆui ; ers for all the h different subsets. Due to the randomization of data owner selection, the mechanism guarantees an optimal sampling 30 payment ← payment + w ui (εˆui ); result by increasing the h because an optimal subset RS is selected 31 else from all the h different subsets. The output of this algorithm is a 32 w ui ← Weq ; set of samples (RS 1 , RS 2 , ..., RSh ) used as an input in Algorithm 2. 33 εi ← (w ui )−1 ; 34 lsU nderPaid ← lsU nderPaid + ui ; Algorithm 1: Sample h subsets of data owners 35 payment ← payment + Weq ; Input: x, DT , CLS, MER, and h 36 end Output: (RS 1 , RS 2 , ..., RSh ) 37 end DT ∗ CLS 2 Wr ← Wab − payment; 1 SS ← ; 38 MER 2 Wr SS ∗ |x | 39 Weq ← Weq + ; 2 |RS | ← ; |lsU nderPaid | SS + |x | − 1 40 lsT emp ← lsU nderPaid; 3 while While h>0 do 41 while Wr > 0; 4 RSh ← {ui |U ndupRandomize(1, |x |)|i ∈ [1, h]}; 42 Wp ← Wab ; 5 h ← h − 1; 43 end 6 end Wp 44 wh ← ; j Algorithm 2 computes the query price and compensation for 45 h = h − 1; all the h subsets. Given a data buyer’s maximum budget Wmax , 46 end query Q, dataset x, number of samples h, number of perturbations SIGIR 2017 eCom, August 2017, Tokyo, JAPAN Rachana Nget, Yang Cao, Masatoshi Yoshikawa Algorithm 3: Perturb the query answer for all h subsets and 5 EXPERIMENT then select an optimal subset Experimental setup: We divide the experiment into two compo- Input: x, h, Φ, (RS 1 , RS 2 , ..., RSh ), and (w 1 , w 2 , ..., w h ) nents: (1) the simulation of our balanced pricing mechanism and (2) Output: ε max , P(Q(RS)opt ), w opt , and RMSEopt the comparison of our mechanism with the baseline pricing mech- 1 m ← h; anism. We examine the query price Wp , root mean squared error 2 while While m>0 do RMSE, average privacy loss ε and average compensation w that 1 Í |RSm | ui each ui obtained from both mechanisms and then conclude that 3 εm ← { ε |i ∈ [0, |RSm | − 1]}; for the same Wp , which mechanism generates the smallest RMSE |RSm | i=0 |x | P(Q(RSm ))k ← { P E Q (x, RSm ) ∗ value. Due to space constraints, we only show the experimental 4 |k ∈ [0, Φ − 1]}; |RSm | result of the following count query Q: "How many people commute sÍ Φ (P(Q(x) − P(Q(RS )) ))2 by personal car in the USA?" m k k =0 5 RMSEm ← |k ∈ Data preparation: From our survey, we obtained 486 records Φ of personal data from 486 data owners. To generate more accurate [1, Φ − 1] ; experimental results, a larger dataset is preferable, so we dupli- cated our survey dataset 500 times to obtain a larger dataset x of 6 m = m − 1; 243,000 records. To conduct such an experiment, each data record 7 end must have two important variables: the maximum tolerable pri- 8 ε max ← Max(ε 1 , ε 2 , ..., ε h ); vacy loss εˆ and a payment scheme w. For the sake of simplicity, 9 optIndex ← {index |ε index = ε max }; we assume εˆ ∈ [0, 1] and two types of payment schemes (as de- 10 RMSEopt ← RMSEopt I ndex ; scribed in Section 3.1). In preparing our data, we generate these 11 P(Q(RS))opt ← P(Q(RS))opt I ndex ; two variables for each record/data owner according to the survey 12 w opt ← w opt I ndex ; answers. When a data owner has chosen to have very high and high alterations/perturbations, they are classified under the conservative group, so his or her εˆi values are set to 0.1 and 0.3, respectively. For Φ, market maker’s benefit χ , and h subsets (RS 1 , RS 2 , ..., RSh ) from low and very low perturbations, the εˆi values are set to 0.7 and 0.9 Algorithm 1, the algorithm returns the query price Wp , remaining respectively, and such data owners are categorized under the liberal budget Wr (if applicable), compensation w i (εi ) for each ui , and group. To optimize their benefits, we set the most optimal payment average compensation w i for each subset because Algorithm 3 scheme for them based on their εˆi values. For the conservative uses this result to select an optimal subset from all h subsets. The group with εˆi values of 0.1 and 0.3, we set a payment scheme type algorithm first computes the available budget w ab by subtracting A, while type B is set for liberal group with εˆi values of 0.7 and 0.9. χ from the given Wmax . Next, the algorithm computes the total In turn, we obtain a usable and large dataset for our experiment. payment Wp required when paying for the maximum privacy loss εˆi Experiment results: We first conduct a simulation of our mech- of ui ∈ RSh . w ui ∈RSh (εˆui ∈RSh ) denotes a payment for data owner anism (Figure 8) to explain the correlation between the query price ui in RSh for εˆi . When Wp is smaller than Wab , the algorithm pays and RMSE , between the query price and average privacy loss ε, each ui for εˆi while using Wr to include more data owners into and between the query price and average compensation value. Fig- RSh by paying for εˆi or εi < εˆi based on Wr . This process repeats ure 8a shows that the RMSE value decreases as the query price until all Wr = 0 or |RSh | = |x |, as the utility is influenced by both increases. This pattern is reasonable in practice because the higher the size of RS and by the privacy loss εi of all ui . Otherwise, when the query price is, the lower the RMSE should be. Remarkably, the Wp > Wab , the algorithm determines the equal payment Weq for RMSE value declines dramatically with query price from $5 to $50 each ui ∈ RSh and then verifies if each ui should be paid exactly but then gradually and slightly decreases for $50 to $1000. We can Weq or less when w ui (εˆui ) < Weq . The updated (RS 1 , RS 2 , ..., RSh ) attribute this phenomenon to the impact of privacy parameter εi as an output is used in Algorithm 3. of each data owner ui and to the number |RS | of data owners re- With the output of Algorithm 2, Algorithm 3 perturbs the query sponding to the query. When the query price is approximately $50 answer and selects an optimal subset from all h subsets. It computes or less, it can only cover the compensation of RS, so with the same the average privacy loss ε and perturbed query result P(Q(RS)) size |RS |, an increase in the query price (i.e., $5 to $50) can also based on the proportional difference between x and RSh by multiply- increase the ε value in RS. However, when the query price exceeds ing result of P E by |x |/|RSh |, and RMSE in each (RS 1 , RS 2 , ..., RSh ). what is needed to pay for εˆi for all ui in RS, the remaining budget It then selects an optimal RS with a maximum average privacy loss is used to include more data owners in RS, which can significantly of ε max denoting a high probability that less random noise is in- or marginally decrease the overall RMSE while increasing the ε cluded in the result. Finally, the algorithm finds the corresponding value depending on the distribution of data. When more conser- RMSEopt , P(Q(RS))opt and w opt of the optimal RS selected. vative data owners are included in RS, this can affect the ε value At the end, data buyers receive the perturbed query answer resulting in just a minor decrease in RMSE despite more money P(Q(RS)) along with the remaining budget Wr (when applicable), being spent. For this reason, the price menu plays a crucial role in the number of data owners in RS, and the mean squared error RMSE providing an overview on approximate degree of change in RMSE in the query answer. Data owners are then compensated according values corresponding to query prices. In turn, data buyers can de- to their actual privacy losses εi . cide whether it is worth spending more money for a minor decrease How to Balance Privacy and Money through Pricing Mechanism SIGIR 2017 eCom, August 2017, Tokyo, JAPAN (a) Query price and RMSE. (b) Query price and ε . (c) Query price and average compensation. Figure 8: Simulation on balanced pricing mechanism. (a) Query price and RMSE of both mechanisms. (b) Query price and ε of both mechanisms. (c) Query price and average compensation of both mecha- nisms. Figure 9: Comparison between the balanced pricing mechanism and baseline pricing mechanism. of RMSE within their available budgets. Figure 8b and Figure 8c exponential-like P E mechanism (see Definition 3.4) to achieve Per- show a similar correlation pattern between the query price and ε sonalized Differential Privacy (PDP) to take advantage of the indi- and between the query price and w. They show that the higher vidual privacy parameter εˆ of data owners, especially of the liberal the query price is, the higher ε and w values become. A marginal group. In contrast, the baseline mechanism can only apply a mini- decrease in ε with a significant rise in query price ($100 to $1000) mum mechanism to achieve PDP by adding a large amount of ran- shown in Figure 8b can be attributed to the phenomenon illustrated dom noise drawn from Laplace distributions utilizing the smallest in Figure 8a whereby the RMSE value only slightly decreases within εˆ of the entire dataset. Second, our mechanism produces a con- a significant price increase. siderably smaller RMSE for the same query price. In other words, We next compare the results of our balanced pricing mecha- for the same level of utility, we can indeed reduce the query price, nism with those of the baseline pricing mechanism (Figure 9). The as our mechanism only queries a small subset of a dataset while experimental results show that our balanced pricing mechanism generating unbiased results from a random sampling and selection considerably outperforms the baseline mechanism under almost all procedure. we thus exclusively compensate the data owners of the conditions. Figure 9a shows that our balanced mechanism produced queried subset, while the baseline mechanism must compensate all a noticeably smaller RMSE value for the same query price relative data owners of a dataset to run a query on the dataset to obtain to the baseline mechanism. In particular, our balanced mechanism unbiased results. Therefore, our balanced pricing mechanism is produced a significantly smaller RMSE value even when the query more efficient than the baseline mechanism. price was set to be relatively low (i.e., $5) because instead of query- In the price menu, it is important to illustrate trends of higher ing from the entire dataset, our balanced pricing mechanism only prices and higher levels of approximate utility (denoted as ε). How- queries from a representative sample RS. This reduces the query ever, Figure 8b shows a slight decrease in ε from $100 to $1000. price while still generating a smaller RMSE. Due to random noise This phenomenon could be attributed to the number of samplings drawn from the Laplace distribution, we can see that the RMSE h applied in the mechanism. Despite showing a budget increase, of the baseline mechanism, rather than declining, rises for query it cannot fully guarantee that ε will increase due to the random prices $50 to $100. Figure 9b and Figure 9c show a similar pattern in selection of data owners with various εˆ values. Thus, our naive that the ε and w of our balanced pricing mechanism are significantly solution is to increase the price gap in the price menu to guarantee higher than those of the baseline mechanism. a distinguished increase in ε for an increasing query price. More discussion on this point will be included in our next work. It is also crucial to ensure that data owners can technically choose 6 DISCUSSION an appropriate maximum tolerable privacy loss εˆi that reflects The above listed experiment results show that our balanced pricing their privacy attitude and risk orientation. This problem indeed mechanism considerably outperforms the baseline pricing mech- remains an open question in the differential privacy community anism. This is attributed to two main factors. First, we apply an regarding how to set the value of ε or εˆ in our setting. Although SIGIR 2017 eCom, August 2017, Tokyo, JAPAN Rachana Nget, Yang Cao, Masatoshi Yoshikawa [7] proposed an economic method for choosing ε, this problem has scheme using game theory. In the present study, we only designed not been widely discussed. A part of solution, we provide some two types of payment schemes for liberal and conservative data options of εˆ = {0.1, 0.3, 0.7, 0.9} corresponding with {very high, owners. We will develop a more sophisticated design in our future high, low, very low} data perturbation level. Very high perturbation work. Moreover, in our study, a market maker is assumed to be (i.e., εˆ = 0.1) means that more random noise is added to the result, a trusted server storing and accessing data owners’ data on their so the data owners have a very high privacy guarantee. However, behalf, yet to some extent, trust has become a difficult question to some data owners might not understand how the perturbation address from both technical and social standpoints. Thus, for future works, so we can provide an interactive interface allowing them work, we can consider a trading framework and pricing mechanisms to see the approximate change on their actual data for a different in which market makers are assumed to be untrustworthy.. value of ε. ˆ A similar concept of the interactive interface3 is used to explain a perturbation via Laplace mechanism. Thus, we can ACKNOWLEDGMENTS create a similar interface for exponential-like data perturbation This work was supported through the A. Advanced Research Net- mechanism to assist data owners and buyers to understand the works JSPS Core-to-Core Program. The work was also supported meaning of ε. ˆ through JSPS KAKENHI Grant Numbers 16K12437 and 17H06099. 7 RELATED WORK REFERENCES In the field of pricing mechanism design, there are two crucial fo- [1] Alessandro Acquisti, Leslie K John, and George Loewenstein. 2013. What is privacy worth? 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