Cooperation Promotion from the Perspective of Behavioral Economics: An Incentive Mechanism Based on Loss Aversion in Vehicular Ad-Hoc Networks

Abstract

As a special mobile ad-hoc network, Vehicular Ad-hoc Networks (VANETs) have the characteristics of high-speed movement, frequent topology changes, multi-hop routing, a lack of energy, storage space limitations, and the possible selfishness of the nodes. These characteristics bring challenges to the design of the incentive mechanism in VANETs. In the current research on the incentive mechanism of VANETs, the mainstream is the reward-based incentive mechanism. Most of these mechanisms are designed based on the expected utility theory of traditional economics and assume that the positive and negative effects produced by an equal amount of gain and loss are equal in absolute value. However, the theory of loss aversion points out that the above effects are not equal. Moreover, this will lead to a deviation between the final decision-making behavior of nodes and the actual optimal situation. Therefore, this paper proposed a Loss-Aversion-based Incentive Mechanism (LAIM) to promote the comprehensive perception and sharing of information in the VANETs. This paper designs the incentive threshold and the threshold factor to motivate vehicle nodes to cooperate. Furthermore, based on the number of messages that the nodes face, the utility function of nodes is redesigned to correct the assumption that a gain and a loss of an equal amount could offset each other in traditional economics. The simulation results show that compared with the traditional incentive mechanism, the LAIM can increase the average utility of nodes by more than 34.35%, which promotes the cooperation of nodes.

Recent Developments on Mobile Ad-Hoc Networks and Vehicular Ad-Hoc Networks

“…In the first paper [3], the authors propose a Loss-Aversion-based Incentive Mechanism (LAIM) to encourage the complete awareness and sharing of information in VANETs. To stimulate the cooperation among vehicle nodes, the authors designed the incentive threshold and the threshold factor.…”