Skip to main content
SpringerLink
Log in

Optimal Contract Design Under Asymmetric Information for Cloud-Enabled Internet of Controlled Things

  • Conference paper
  • First Online:
Decision and Game Theory for Security (GameSec 2016)

Part of the book series: Lecture Notes in Computer Science ((LNSC,volume 9996))

Included in the following conference series:

Abstract

The development of advanced wireless communication technologies and smart embedded control devices makes everything connected, leading to an emerging paradigm of the Internet of Controlled Things (IoCT). IoCT consists of two layers of systems: cyber layer and physical layer. This work aims to establish a holistic framework that integrates the cyber-physical layers of the IoCT through the lens of contract theory. For the cyber layer, we use a FlipIt game to capture the cloud security. We focus on two types of cloud, high-type and low-type, in terms of their provided quality of service (QoS). The cloud’s type is of private information which is unknown to the contract maker. Therefore, the control system administrator (CSA) at the physical layer needs to design a menu of two contracts for each type of service provider (SP) due to this asymmetric information structure. According to the received contract, SP decides his cyber defense strategy in the FlipIt game of which the Nash equilibrium determines the QoS of the cloud, and further influences the physical system performance. The objective of CSA is to minimize the payment to the cloud SP and the control cost jointly by designing optimal contracts. Due to the interdependence between the cyber and physical layers in the cloud-enabled IoCT, we need to address the cloud security and contract design problems in an integrative manner. We find that CSA always requires the best QoS from two types of cloud. In addition, under the optimal contracts, the utilities of both SPs are constants. Furthermore, no contracts will be offered to the cloud if the resulting service cannot stabilize the physical system.

This work is partially supported by the grant CNS-1544782, EFRI-1441140 and SES-1541164 from National Science Foundation.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 39.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 54.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  1. Jayavardhana, G., Buyya, R., Marusic, S., Palaniswami, M.: Internet of Things (IoT): a vision, architectural elements, and future directions. Future Gener. Comput.Syst. 29(7), 1645–1660 (2013)

    Article  Google Scholar 

  2. Colin, T.: Advanced persistent threats and how to monitor and deter them. Netw. Secur. 2011(8), 16–19 (2011)

    Article  Google Scholar 

  3. Pawlick, J., Farhang, S., Zhu, Q.: Flip the cloud: cyber-physical signaling games in the presence of advanced persistent threats. In: Khouzani, M.H.R., Panaousis, E., Theodorakopoulos, G. (eds.) GameSec 2015. LNCS, vol. 9406, pp. 289–308. Springer, Heidelberg (2015). doi:10.1007/978-3-319-25594-1_16

    Chapter  Google Scholar 

  4. Xu, Z., Zhu, Q.: Cross-layer secure cyber-physical control system design for networked 3D printers. In: Proceedings of American Control Conference (ACC), pp. 1191–1196 (2016)

    Google Scholar 

  5. Hu, G., Tay, W.P., Wen, Y.: Cloud robotics: architecture, challenges and applications. IEEE Netw. 26(3), 21–28 (2012)

    Article  Google Scholar 

  6. Chen, J., Zhu, Q.: Resilient and decentralized control of multi-level cooperative mobile networks to maintain connectivity under adversarial environment. arXiv preprint arXiv:1505.07158 (2016)

  7. Krutz, R.L., Vines, R.D.: Cloud security: a comprehensive guide to secure cloud computing. Wiley Publishing, Indianapolis (2010)

    Google Scholar 

  8. Fang, X., Misra, S., Xue, G., Yang, D.: Managing smart grid information in the cloud: opportunities, model, and applications. IEEE Netw. 26(4), 32–38 (2012)

    Article  Google Scholar 

  9. van Dijk, M., Juels, A., Oprea, A., Rivest, R.L.: FlipIt: the game of stealthy takeover. J. Cryptology 26(4), 655–713 (2013)

    Article  MathSciNet  MATH  Google Scholar 

  10. Triantis, G.G.: Financial contract design in the world of venture capital. University of Chicago Law Review 68 (2001)

    Google Scholar 

  11. Fehr, E., Klein, A., Schmidt, M.: Fairness and contract design. Econometrica 75(1), 121–154 (2007)

    Article  MathSciNet  MATH  Google Scholar 

  12. DellaVigna, S., Malmendier, U.: Contract design and self-control: theory and evidence. Q. J. Econ. CXIX(2), 353–402 (2004)

    Article  MATH  Google Scholar 

  13. Doherty, N.A., Dionne, G.: Insurance with undiversifiable risk: contract structure and organizational form of insurance firms. J. Risk Uncertainty 6(2), 187–203 (1993)

    Article  Google Scholar 

  14. Skees, J.R., Black, J.R., Barnett, B.J.: Designing and rating an area yield crop insurance contract. Am. J. Agric. Econ. 79(2), 430–438 (1997)

    Article  Google Scholar 

  15. Yang, Z., Aydin, G., Babich, V., Beil, D.R.: Supply disruptions, asymmetric information, and a backup production option. Manage. Sci. 55(2), 192–209 (2009)

    Article  MATH  Google Scholar 

  16. Corbett, C.J., de Groote, X.: A supplier’s optimal quantity discount policy under asymmetric information. Manage. Sci. 46(3), 444–450 (2000)

    Article  MATH  Google Scholar 

  17. Pant, Y.V., Abbas, H., Mohta, K., Nghiem, T.X., Devietti, J., Mangharam, R.: Co-design of anytime computation and robust control. In: Proceedings of Real-Time Systems Symposium, pp. 43–52 (2015)

    Google Scholar 

  18. Azab, M., Eltoweissy, M.: Defense as a service cloud for cyber-physical systems. In: Proceedings of the Conference on Collaborative Computing: Networking, Applications and Worksharing, pp. 392–401 (2011)

    Google Scholar 

  19. Gao, Y., Chen, Y., Wang, C.Y., Liu, K.R.: A contract-based approach for ancillary services in V2G networks: optimality and learning. In: Proceedings of IEEE International Conference on Computer Communications (INFOCOM), pp. 1151–1159 (2013)

    Google Scholar 

  20. Ferraro, P.J.: Asymmetric information and contract design for payments for environmental services. Ecol. Econ. 65(4), 810–821 (2008)

    Article  Google Scholar 

  21. Perera, C., Zaslavsky, A., Christen, P., Georgakopoulos, D.: Sensing as a service model for smart cities supported by internet of things. Trans. Emerg. Telecommun. Technol. 25(1), 81–93 (2014)

    Article  Google Scholar 

  22. Jezequel, J.-M., Train, M., Mingins, C.: Design Patterns with Contracts. Addison-Wesley Longman Publishing Co., Boston (1999)

    Google Scholar 

  23. Heckel, R., Lohmann, M.: Towards contract-based testing of web services. Electr. Notes Theoret. Comput. Sci. 116, 145–156 (2005)

    Article  Google Scholar 

  24. Sharpe, S.A.: Asymmetric information, bank lending, and implicit contracts: a stylized model of customer relationships. J. Financ. 45(4), 1069–1087 (1990)

    Google Scholar 

  25. Myerson, R.B.: Incentive compatibility and the bargaining problem. Econometrica 47(1), 61–74 (1979)

    Article  MathSciNet  MATH  Google Scholar 

  26. Imer, O.C., Yuksel, S., Baar, T.: Optimal control of LTI systems over unreliable communication links. Automatica 42(9), 1429–1439 (2006)

    Article  MathSciNet  MATH  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Electrical and Computer Engineering, Tandon School of Engineering, New York University, Brooklyn, NY, 11201, USA

    Juntao Chen & Quanyan Zhu

Authors
  1. Juntao Chen
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Quanyan Zhu
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Juntao Chen .

Editor information

Editors and Affiliations

  1. New York University , New York, New York, USA

    Quanyan Zhu

  2. The University of Melbourne , Melbourne, Victoria, Australia

    Tansu Alpcan

  3. University of Brighton , Brighton, United Kingdom

    Emmanouil Panaousis

  4. University of Southern California , Los Angeles, California, USA

    Milind Tambe

  5. Carnegie Mellon University , Pittsburgh, New York, USA

    William Casey

Rights and permissions

Reprints and permissions

Copyright information

© 2016 Springer International Publishing AG

About this paper

Cite this paper

Chen, J., Zhu, Q. (2016). Optimal Contract Design Under Asymmetric Information for Cloud-Enabled Internet of Controlled Things. In: Zhu, Q., Alpcan, T., Panaousis, E., Tambe, M., Casey, W. (eds) Decision and Game Theory for Security. GameSec 2016. Lecture Notes in Computer Science(), vol 9996. Springer, Cham. https://doi.org/10.1007/978-3-319-47413-7_19

Download citation

  • DOI: https://doi.org/10.1007/978-3-319-47413-7_19

  • Published:

  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-319-47412-0

  • Online ISBN: 978-3-319-47413-7

  • eBook Packages: Computer ScienceComputer Science (R0)

Publish with us

Policies and ethics

Search

Navigation