Designing an Incentive Mechanism to Reward Users for Advertising Content Usage Considering Network Effects

Data rewarding is a novel business model that leads to an economic trend in mobile networks. In this scheme, the advertiser incentivizes users to watch ads and, in return, receive a reward in the form of mobile data. In this work, we model the interaction between an advertiser who has asymmetric information about users and users who are connected to each other under an underlying network, using the contract theory approach. Then, we obtain the necessary and sufficient conditions for an optimal and practical contract to motivate users to participate in the reward scheme and encourage them to declare their information truthfully. The formulation of this contract is a non-convex-constrained optimization problem. Using lemmas and propositions, we formulate the initial optimization problem that is challenging to solve as an optimization problem with convex constraints and prove that these two problems are equivalent to each other. Finally, with extensive numerical evaluations, we demonstrate the performance efficiency of the data rewarding scheme compared to benchmark schemes.