Incentive Mechanism for Differentially Private Federated Learning in Industrial Internet of Things

Abstract

Federated learning (FL) is a newly emerging distributed machine learning paradigm, whereby a server can coordinate multiple clients to jointly train a learning model by using their private datasets. Many researches focus on designing incentive mechanisms in FL, but most of them cannot allow that clients flexibly determine privacy budgets by themselves. In this article, we propose a privacy-preserving incentive mechanism (NICE) based on differential privacy (DP) and Stackelberg game for FL systems in industrial Internet of Things. First, we design a flexible privacy-preserving mechanism for NICE, in which clients can add a Laplace noise into the loss function according to a customized privacy budget. Under this mechanism, we design two incentive utility functions for the server and clients. Next, we model the utility optimization problems as a two-stage Stackelberg game by seeing the server as a leader and the clients as followers. Finally, we derive an optimal Stackelberg equilibrium solution for both the stages of the whole game. Based on this solution, NICE can make the server and all clients achieve their maximum utilities simultaneously. In addition, we conduct extensive simulations on real-world datasets to demonstrate the significant performance of the proposed mechanism.