A Reputation-Based Contract for Repeated Crowdsensing With Costly Verification

A system operator asks a group of sensors toexert costly effort to collect accurate measurements of a value of interest over time. At each time, each sensor is asked to report its observation to the operator, and is suitably compensated for the costly effort it exerts. Since both the effort and the observation are private information for the sensor, a naive payment scheme which compensates the sensor based only on its self-reported values of the effort and the measurements will lead to both shirking and falsification of outcomes by the sensor. In this paper, we design an appropriate compensation scheme to incentivize the sensors to both exert costly effort and then reveal the resulting observation truthfully. To this end, we formulate the problem as a repeated game and propose a compensation scheme that employs stochastic verification by the operator coupled with an algorithm to assign a reputation to each sensor. By including the history of the behavior exerted by the sensor in determining present payments, we show that the operator can incentivize higher effort as well as more frequent truthtelling by the sensors.