Role of Gifts in Decision Making: An Endowment Effect Incentive Mechanism for Offloading in the Iov

Jiaqi Liu
Wei Wang
Deng Li
Shaohua Wang
Hui Liu, Missouri State University


The Internet of Vehicles (IoV) is composed of road side units (RSUs) nodes and vehicle nodes. Because the limited bandwidth of RSUs can not satisfy massive requests from vehicle nodes, offloading technology is proposed. Generally, spare vehicle nodes (SVs) with redundant resources are motivated to cache data from RSUs. However, due to the selfishness, the participation of SVs is generally low. Hence, an effective incentive mechanism to motivate SVs to offload is important. There are two problems with current incentive mechanisms: 1) all of them ignore loss aversion, which is the act of preferring avoidance of loss over acquiring equivalent gains. This act can lead to deviation in the final decision and 2) no attention is paid to the critical effects that initial allocation of property have on the final resource allocation. However, researches on behavior economics have found that loss aversion exists and the final resource allocation is affected by the initial configuration. Therefore, we propose an incentive mechanism called reverse auction based on endowment effect (RABEE). To the first problem, we introduce the endowment effect from behavior economics, and propose a term called endowment compensation for increasing the participation rate of SVs. For the second problem, by changing the initial allocation of endowment compensation, we illustrate through theoretical analysis and simulations the significance the initial configuration has in terms of the final resource allocation. Simulations show that RABEE increases the average utility of SVs by 6.8% compared with the conventional scheme, and it also improves participation rate by 2%.