The rapid growth of AI-generated content (AIGC) services has created an urgent need for effective prompt pricing strategies, yet current approaches overlook users' strategic two-step decision-making process in selecting and utilizing generative AI models. This oversight creates two key technical challenges: quantifying the relationship between user prompt capabilities and generation outcomes, and optimizing platform payoff while accounting for heterogeneous user behaviors. We address these challenges by introducing prompt ambiguity, a theoretical framework that captures users' varying abilities in prompt engineering, and developing an Optimal Prompt Pricing (OPP) algorithm. Our analysis reveals a counterintuitive insight: users with higher prompt ambiguity (i.e., lower capability) exhibit non-monotonic prompt usage patterns, first increasing then decreasing with ambiguity levels, reflecting complex changes in marginal utility. Experimental evaluation using a character-level GPT-like model demonstrates that our OPP algorithm achieves up to 31.72 % improvement in platform payoff compared to existing pricing mechanisms, validating the importance of user-centric prompt pricing in AIGC services.

Federated learning (FL) has been extensively applied in industrial cyber-physical systems (ICPSs) to develop powerful models for complex industrial tasks (e.g., fault diagnosis), while safeguarding industrial data confidentiality. Asynchronous federated learning (AFL) effectively mitigates the straggler issue in the synchronous paradigm by aggregating client models in a first-come-first-served manner. Proper client selection is crucial for achieving efficient model training in AFL. A widely adopted model for implementing client selection in AFL is multi-armed bandit (MAB), which models client selection as arm pulling. Existing MAB-based client selection schemes overlook practical scenarios where direct client-server communications are unfavorable or unavailable (for example, in ICPSs such as mines, where communication infrastructure is underdeveloped, direct client-server communication is often unreliable or even unfeasible). In such cases, the server needs to incentivize self-interested relays to perform arm-pulling actions, including selecting the right client and relaying the communication from the selected client to the server. This paper proposes the first framework of incentivized online client selection for AFL. The design and optimization of such a framework involve significant challenges due to the tight coupling between unknown client behavior and private relay cost. To circumvent this challenge, we adopt the dual-based method and construct a special Lagrangian function that incorporates client behavior learning and relay cost revelation, and utilize it to design a socially-optimal mechanism for the framework. Our mechanism satisfies several desirable properties, including voluntary participation, incentive compatibility, relay utilization fairness, and client participation fairness. The proposed mechanism achieves the same asymptotic performance as the state-of-the-art benchmark that requires additional information. Furthermore, our analysis reveals that more available relays bring our mechanism closer to the theoretical upper bound of social performance. Numerical results demonstrate that our proposed mechanism achieves up to 85% and 99% of the social welfare obtained by the benchmarks.

Machine learning (ML) model trading, known for its role in protecting data privacy, faces a major challenge: information asymmetry. This issue can lead to model deception, a problem that current literature has not fully solved, where the seller misrepresents model performance to earn more. We propose a game-theoretic approach, adding a verification step in the ML model market that lets buyers check model quality before buying. However, this method can be expensive and offers imperfect information, making it harder for buyers to decide. Our analysis reveals that a seller might probabilistically conduct model deception considering the chance of model verification. This deception probability decreases with the verification accuracy and increases with the verification cost. To maximize seller payoff, we further design optimal pricing schemes accounting for heterogeneous buyers’ strategic behaviors. Interestingly, we find that reducing information asymmetry benefits both the seller and buyer. Meanwhile, protecting buyer order information doesn’t improve the payoff for the buyer or the seller. These findings highlight the importance of reducing information asymmetry in ML model trading and open new directions for future research.

A proper mechanism design can help federated learning (FL) to achieve good social welfare by coordinating self-interested clients through the learning process. However, existing mechanisms neglect the network effects of client participation, leading to suboptimal incentives and social welfare. This paper addresses this gap by exploring network effects in FL incentive mechanism design. We establish a theoretical model to analyze FL model performance and quantify the impact of network effects on heterogeneous client participation. Our analysis reveals the non-monotonic nature of FL network effects. To leverage such effects, we propose a model trading and sharing (MTS) framework that allows clients to obtain FL models through participation or purchase. To tackle heterogeneous clients' strategic behaviors, we further design a socially efficient model trading and sharing (SEMTS) mechanism. Our mechanism achieves social welfare maximization solely through customer payments, without additional incentive costs. Experimental results on an FL hardware prototype demonstrate up to 148.86% improvement in social welfare compared to existing mechanisms.

Machine learning (ML) model trading prevents data breaches in privacy-sensitive data-driven applications. Departing from commonly assumed complete information scenarios, we consider the more practical trading scenario where model deception may emerge under information asymmetry. More specifically, the model seller may provide false information on model quality to maximize her payoff. This paper takes the first step in tackling information asymmetry through the lens of model verification. We propose an ML model market that allows buyers to verify model quality before purchasing. Such verification can be costly and often imperfect, which makes the buyer's decision highly nontrivial. We first formulate the ML model trading process as a three-stage sequential game with imperfect information, where the seller determines the model delivery strategy after observing the buyer's order decision. Our analysis reveals that at the equilibrium, the seller will probabilistically conduct model deception, considering the possibility of model verification. The equilibrium deception probability increases with the buyer's verification cost and decreases with verification accuracy. Interestingly, we also show that reducing information asymmetry through verification benefits both the buyer and seller. We further consider a second market model with buyer order information protection, where the buyer's order information is unobservable before the seller makes the delivery strategy. Our analysis shows a surprising result under this market model: protecting buyer's order information will not increase the payoff of either the buyer or seller.

Federated learning (FL) is a distributed learning paradigm that enables a large number of devices to collaboratively learn a model without sharing their raw data. Despite its practical efficiency and effectiveness, the iterative on-device learning process incurs a considerable cost in terms of learning time and energy consumption, which depends crucially on the number of selected clients and the number of local iterations in each training round. In this paper, we analyze how to design adaptive FL that optimally chooses these essential control variables to minimize the total cost while ensuring convergence. Theoretically, we analytically establish the relationship between the total cost and the control variables with the convergence upper bound. To efficiently solve the cost minimization problem, we develop a low-cost sampling-based algorithm to learn the convergence related unknown parameters. We derive important solution properties that effectively identify the design principles for different metric preferences. Practically, we evaluate our theoretical results both in a simulated environment and on a hardware prototype. Experimental evidence verifies our derived properties and demonstrates that our proposed solution achieves near-optimal performance for various datasets, different machine learning models, and heterogeneous system settings.

Federated learning (FL) is a distributed learning paradigm that enables a large number of mobile devices to collaboratively learn a model under the coordination of a central server without sharing their raw data. Despite its practical efficiency and effectiveness, the iterative on-device learning process (e.g., local computations and global communications with the server) incurs a considerable cost in terms of learning time and energy consumption, which depends crucially on the number of selected clients and the number of local iterations in each training round. In this paper, we analyze how to design adaptive FL in mobile edge networks that optimally chooses these essential control variables to minimize the total cost while ensuring convergence. We establish the analytical relationship between the total cost and the control variables with the convergence upper bound. To efficiently solve the cost minimization problem, we develop a low-cost sampling-based algorithm to learn the convergence related unknown parameters. We derive important solution properties that effectively identify the design principles for different optimization metrics. Practically, we evaluate our theoretical results both in a simulated environment and on a hardware prototype. Experimental evidence verifies our derived properties and demonstrates that our proposed solution achieves near-optimal performance for different optimization metrics for various datasets and heterogeneous system and statistical settings.