Motivated by a growing market that involves buying and selling data over the web, we study pricing schemes that assign value to queries issued over a database. Previous work studied pricing mechanisms that compute the price of a query by extending a data seller's explicit prices on certain queries, or investigated the properties that a pricing function should exhibit without detailing a generic construction. In this work, we present a formal framework for pricing queries over data that allows the construction of general families of pricing functions, with the main goal of avoiding arbitrage. We consider two types of pricing schemes: instance-independent schemes, where the price depends only on the structure of the query, and answer-dependent schemes, where the price also depends on the query output. Our main result is a complete characterization of the structure of pricing functions in both settings, by relating it to properties of a function over a lattice. We use our characterization, together with information-theoretic methods, to construct a variety of arbitrage-free pricing functions. Finally, we discuss various tradeoffs in the design space and present techniques for efficient computation of the proposed pricing functions.
We study markets for private data using differential privacy. We consider a setting in which a data analyst wishes to buy information from a population from which he can estimate some statistic. The analyst wishes to obtain an accurate estimate cheaply, while the owners of the private data experience some cost for their loss of privacy. Agents are rational and we wish to design truthful mechanisms. In the information realm, loss of privacy is usually associated with failure to control access to information, to control the flow of information, or to control the purposes for which information is employed. Differential privacy arose in a context in which ensuring privacy is a challenge even if all these control problems are solved: privacy-preserving statistical analysis of data. The problem of statistical disclosure control – revealing accurate statistics about a set of respondents while preserving the privacy of individuals – has a venerable history, with an extensive literature spanning statistics, theoretical computer science, security, databases, and cryptography (see, for example, the excellent survey [1], the discussion of related work in [2] and the Journal of Official Statistics 9 (2), dedicated to confidentiality and disclosure control). This long history is a testament the importance of the problem. Statistical databases can be of enormous social value; they are used for apportioning resources, evaluating medical therapies, understanding the spread of disease, improving economic utility, and informing us about ourselves as a species. The data may be obtained in diverse ways. Some data, such as census, tax, and other sorts of official data, are compelled; others are collected opportunistically, for example, from traffic on the internet, transactions on Amazon, and search engine query logs; other data are provided altruistically, by respondents who hope that sharing their information will help others to avoid a specific misfortune, or more generally, to increase the public good. Altruistic data donors are typically promised their individual data will be kept confidential – in short, they are promised “privacy.” Similarly, medical data and legally compelled data, such as census data, tax return data, have legal privacy mandates. In our view, ethics demand that opportunistically obtained data should be treated no differently, especially when there is no reasonable alternative to engaging in the actions that generate the data in question. The problems remain: even if data encryption, key management, access control, and the motives of the data curator Personal data has value to both its owner and to institutions who would like to analyze it. Privacy mechanisms protect the owner's data while releasing to analysts noisy versions of aggregate query results. But such strict protections of the individual's data have not yet found wide use in practice. Instead, Internet companies, for example, commonly provide free services in return for valuable sensitive information from users, which they exploit and sometimes sell to third parties. As awareness of the value of personal data increases, so has the drive to compensate the end-user for her private information. The idea of monetizing private data can improve over the narrower view of hiding private data, since it empowers individuals to control their data through financial means. In this article we propose a theoretical framework for assigning prices to noisy query answers as a function of their accuracy, and for dividing the price amongst data owners who deserve compensation for their loss of privacy. Our framework adopts and extends key principles from both differential privacy and query pricing in data markets. We identify essential properties of the pricing function and micropayments, and characterize valid solutions.