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Abstract
Data ecosystems are becoming larger and more complex due to online tracking,
wearable computing, and the Internet of Things. But privacy concerns are
threatening to erode the potential benefits of these systems. Recently, users
have developed obfuscation techniques that issue fake search engine queries,
undermine location tracking algorithms, or evade government surveillance.
Interestingly, these techniques raise two conflicts: one between each user and
the machine learning algorithms which track the users, and one between the
users themselves. In this paper, we use game theory to capture the first
conflict with a Stackelberg game and the second conflict with a mean field
game. We combine both into a dynamic and strategic bi-level framework which
quantifies accuracy using empirical risk minimization and privacy using
differential privacy. In equilibrium, we identify necessary and sufficient
conditions under which 1) each user is incentivized to obfuscate if other users
are obfuscating, 2) the tracking algorithm can avoid this by promising a level
of privacy protection, and 3) this promise is incentive-compatible for the
tracking algorithm.