Incentive mechanism in crowdsourcing with moral hazard

With the widely adoption of smart mobile devices, there is a rapidly development of location based services. One key feature in providing the service is the crowdsourcing in which the principal obtains essential data from a large group of users, and inversely sharing the data based service with everyone for free. In this paper, we investigate the problem of how to provide continuous incentives for users to participate in the crowdsourcing activity, which can be referred to the moral hazard problem in the contract theory. First, a performance related incentive mechanism is proposed. Then, the utility maximization problem of the principal is formulated, under the constraint that each user maximizes its own utility by choosing the optimal effort in the crowdsourcing activity. Finally, the numerical results show that by using the proposed incentive mechanism, the users obtains the continuous incentives to participate in the crowdsourcing activity, and the principal successfully maximize the utilities.