A Differentially Private and Truthful Incentive Mechanism for Traffic Offload to Public Transportation

Encouraging passengers to take public transportation reduces cost and enhances sustainability of urban ecosystems. However, the passengers incur some inconvenience cost due to potential delays and discomfort when switching from private to public transit service. In this paper, we propose a reverse auction-based mechanism so that the government can incentivize the passengers to take public transit system instead of private transit services. The proposed mechanism achieves individual rationality, truthfulness and near optimal social welfare. However, revealing passengers’ truthful inconvenience cost raises privacy concerns. Hence, a truthful and privacy preserving auction mechanism is investigated in this paper. The mechanism design is formulated as a mixed integer program, which makes the VCG-like payment scheme computationally intractable. To mitigate the computation complexity, a heuristic algorithm is proposed as an approximation. We show that truthfulness, near optimal social welfare, individual rationality and differential privacy are preserved by the heuristic algorithm. The proposed approach is demonstrated using numerical case study.