Two-Level Stackelberg Game for IoT Computational Resource Trading Mechanism: A Smart Contract Approach

Abstract

To support the increasing computation-intensive applications in the Internet of Things (IoT), edge computing is introduced to provide mobile devices computing resources for performing low-latency tasks. Therefore, how to design an effective and secure computing resource allocation mechanism is attracting increasing attention. A lot of works have been done to design an effective computational resource market for IoT, but the problems of vulnerability and inefficiency still exist. In this article, we propose a two-level Stackelberg game-based computing resource trading mechanism for mobile IoT devices with a credit-based payment approach, which is implemented by smart contracts on blockchain. In our model, the Stackelberg game consists of two levels, i.e., leader-level and user-level. In the leader-level, the computing service provider (CSP) and its agent constitute a composite leader. The agent purchases computing resource from CSP on credit and acts as a broker among leader-level and user-level reselling these computing resources to users. In the user-level, every user experiences social externality, which means users are interdependent. The leader-level subgame makes credit payment easier by making loaning and trading become a joint credit payment. The user-level subgame makes the market more active and closer to reality by introducing social externality. Besides, smart contracts can prevent malicious behaviors such as delay payment. We also conduct equilibrium analysis and prove the existence and uniqueness of the Nash equilibrium in our Stackelberg game-based model. Finally, we conduct numerical experiments to evaluate the cost of smart contracts and the performance of each entity with the proposed pricing mechanism.