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A Profit-Maximizing Model Marketplace with Differentially Private Federated Learning

Existing machine learning (ML) model marketplaces generally require data owners to share their raw data, leading to serious privacy concerns. Federated learning (FL) can partially alleviate this issue by enabling model training without raw data exchange. However, data owners are still susceptible to privacy leakage from gradient exposure in FL, which discourages their participation. In this work, we advocate a novel differentially private FL (DPFL)-based ML model marketplace. We focus on the broker-centric design. Specifically, the broker first incentivizes data owners to participate in model training via DPFL by offering privacy protection as per their privacy budgets and explicitly accounting for their privacy costs. Then, it conducts optimal model versioning and pricing to sell the obtained model versions to model buyers. In particular, we focus on the broker’s profit maximization, which is challenging due to the significant difficulties in the revenue characterization of model trading and the cost estimation of DPFL model training. We propose a two-layer optimization framework to address it, i.e., revenue maximization and cost minimization under model quality constraints. The latter is still challenging due to its non-convexity and integer constraints. We hence propose efficient algorithms, and their performances are both theoretically guaranteed and empirically validated.