Federated learning promises to revolutionize machine learning by enabling collaborative model training without compromising data privacy. However, practical adaptability can be limited by critical factors, such as the participation dilemma. Participating entities are often unwilling to contribute to a learning system unless they receive some benefits, or they may pretend to participate and free-ride on others. This chapter identifies the fundamental challenges in designing incentive mechanisms for federated learning systems. It examines how foundational concepts from economics and game theory can be applied to federated learning, alongside technology-driven solutions such as blockchain and deep reinforcement learning. This work presents a comprehensive taxonomy that thoroughly covers both centralized and decentralized architectures based on the aforementioned theoretical concepts. Furthermore, the concepts described are presented from an application perspective, covering emerging industrial applications, including healthcare, smart infrastructure, vehicular networks, and blockchain-based decentralized systems. Through this exploration, this chapter demonstrates that well-designed incentive mechanisms are not merely optional features but essential components for the practical success of federated learning. This analysis reveals both the promising solutions that have emerged and the significant challenges that remain in building truly sustainable, fair, and robust federated learning ecosystems.

Recently, federated learning (FL) has emerged as a novel framework for distributed model training. In FL, the task publisher (TP) releases tasks, and local model owners (LMOs) use their local data to train models. Sometimes, FL suffers from the lack of training data, and thus workers are recruited for gathering data. To this end, this paper proposes an adaptive incentive mechanism from a service-oriented perspective, with the objective of maximizing the utilities of TP, LMOs and workers. Specifically, a Stackelberg game is theoretically established between the LMOs and TP, positioning TP as the leader and the LMOs as followers. An analytical Nash equilibrium solution is derived to maximize their utilities. The interaction between LMOs and workers is formulated by a multi-agent Markov decision process (MAMDP), with the optimal strategy identified via deep reinforcement learning (DRL). Additionally, an Adaptively Searching the Optimal Strategy Algorithm (ASOSA) is designed to stabilize the strategies of each participant and solve the coupling problems. Extensive numerical experiments are conducted to validate the efficacy of the proposed method.

Federated learning (FL) provides a decentralized framework that enables universal model training through collaborative efforts on mobile nodes, such as smart vehicles in the Internet of Vehicles (IoV). Each smart vehicle acts as a mobile client, contributing to the process without uploading local data. This method leverages non-independent and identically distributed (non-IID) training data from different vehicles, influenced by various driving patterns and environmental conditions, which can significantly impact model convergence and accuracy. Although client selection can be a feasible solution for non-IID issues, it faces challenges related to selection metrics. Traditional metrics evaluate client data quality independently per round and require client selection after all clients complete local training, leading to resource wastage from unused training results. In the IoV context, where vehicles have limited connectivity and computational resources, information asymmetry in client selection risks clients submitting false information, potentially making the selection ineffective. To tackle these challenges, we propose a novel Long-term Client-Selection Federated Learning based on Truthful Auction (LCSFLA). This scheme maximizes social welfare with consideration of long-term data quality using a new assessment mechanism and energy costs, and the advised auction mechanism with a deposit requirement incentivizes client participation and ensures information truthfulness. We theoretically prove the incentive compatibility and individual rationality of the advised incentive mechanism. Experimental results on various datasets, including those from IoV scenarios, demonstrate its effectiveness in mitigating performance degradation caused by non-IID data.

With the growing demand for Uncrewed Aerial Vehicle (UAV) networks in sensitive applications, such as urban monitoring, emergency response, and secure sensing, ensuring reliable connectivity and covert communication has become increasingly vital. However, dynamic mobility and exposure risks pose significant challenges. To tackle these challenges, this paper proposes a self-organizing UAV network framework combining Graph Diffusion-based Policy Optimization (GDPO) with a Stackelberg Game (SG)-based incentive mechanism. The GDPO method uses generative AI to dynamically generate sparse but well-connected topologies, enabling flexible adaptation to changing node distributions and Ground User (GU) demands. Meanwhile, the Stackelberg Game (SG)-based incentive mechanism guides self-interested UAVs to choose relay behaviors and neighbor links that support cooperation and enhance covert communication. Extensive experiments are conducted to validate the effectiveness of the proposed framework in terms of model convergence, topology generation quality, and enhancement of covert communication performance.

--In Federated Learning (FL), multiple clients jointly train a machine learning model by sharing gradient information, instead of raw data, with a server over multiple rounds. T o address the possibility of information leakage in spite of sharing only the gradients, Local Differential Privacy (LDP) is often used. In LDP, clients add a selective amount of noise to the gradients before sending the same to the server . Although such noise addition protects the privacy of clients, it leads to a degradation in global model accuracy. In this paper, we model this privacy-accuracy trade-off as a game, where the sever incentivizes the clients to add a lower degree of noise for achieving higher accuracy, while the clients attempt to preserve their privacy at the cost of a potential loss in accuracy. A token based incentivization mechanism is introduced in which the quantum of tokens credited to a client in an FL round is a function of the degree of perturbation of its gradients. The client can later access a newly updated global model only after acquiring enough tokens, which are to be deducted from its balance. We identify the players, their actions and payoff, and perform a strategic analysis of the game. Extensive experiments were carried out to study the impact of different parameters. Federated Learning (FL) allows multiple clients to train a model by sharing their local gradients with a central server for training over multiple rounds. To further prevent data leakage through different forms of inference attacks on FL [1], use of Local Differential Privacy (LDP) has been proposed [2]. However, LDP-FL faces a critical challenge in ensuring fair participation while attempting to achieve accuracy of the global model and respecting the privacy concerns of individual clients. The clients tend to contribute differently to the model as their degree of participation varies based on a privacy budget and the perceived value of their contributions. Thus, there are two opposing factors affecting the success of an LDP-FL set up. The goal of the server is to achieve high global model accuracy and hence, would prefer the least possible perturbation of gradients done by the clients. The clients, on the other hand, are more inclined to behave in a way that protects their privacy and tend to add more noise to their gradients. However, if all the clients overly perturb their gradients, eventually the accuracy of the global model will suffer, rendering the LDP-FL process ineffective.

Federated learning (FL) enables collaborative model training across decentralized clients while preserving data privacy. However, its open-participation nature exposes it to data-poisoning attacks, in which malicious actors submit corrupted model updates to degrade the global model. Existing defenses are often reactive, relying on statistical aggregation rules that can be computationally expensive and that typically assume an honest majority. This paper introduces a proactive, economic defense: a lightweight Bayesian incentive mechanism that makes malicious behavior economically irrational. Each training round is modeled as a Bayesian game of incomplete information in which the server, acting as the principal, uses a small, private validation dataset to verify update quality before issuing payments. The design satisfies Individual Rationality (IR) for benevolent clients, ensuring their participation is profitable, and Incentive Compatibility (IC), making poisoning an economically dominated strategy. Extensive experiments on non-IID partitions of MNIST and FashionMNIST demonstrate robustness: with 50% label-flipping adversaries on MNIST, the mechanism maintains 96.7% accuracy, only 0.3 percentage points lower than in a scenario with 30% label-flipping adversaries. This outcome is 51.7 percentage points better than standard FedAvg, which collapses under the same 50% attack. The mechanism is computationally light, budget-bounded, and readily integrates into existing FL frameworks, offering a practical route to economically robust and sustainable FL ecosystems.

Federated Learning (FL) is a collaborative machine learning paradigm which allows participants to collectively train a model while training data remains private. This paradigm is especially beneficial for sectors like finance, where data privacy, security and model performance are paramount. FL has been extensively studied in the years following its introduction, leading to, among others, better performing collaboration techniques, ways to defend against other clients trying to attack the model, and contribution assessment methods. An important element in for-profit Federated Learning is the development of incentive methods to determine the allocation and distribution of rewards for participants. While numerous methods for allocation have been proposed and thoroughly explored, distribution frameworks remain relatively understudied. In this paper, we propose a novel framework which introduces client-specific tokens as investment vehicles within the FL ecosystem. Our framework aims to address the limitations of existing incentive schemes by leveraging a decentralized finance (DeFi) platform and automated market makers (AMMs) to create a more flexible and scalable reward distribution system for participants, and a mechanism for third parties to invest in the federation learning process.

Vertical Federated Learning (VFL) enables organizations with disjoint feature spaces but shared user bases to collaboratively train models without sharing raw data. However, existing VFL systems face critical limitations: they often lack effective incentive mechanisms, struggle to balance privacy-utility tradeoffs, and fail to accommodate clients with heterogeneous resource capabilities. These challenges hinder meaningful participation, degrade model performance, and limit practical deployment. To address these issues, we propose OPUS-VFL, an Optimal Privacy-Utility tradeoff Strategy for VFL. OPUS-VFL introduces a novel, privacy-aware incentive mechanism that rewards clients based on a principled combination of model contribution, privacy preservation, and resource investment. It employs a lightweight leave-one-out (LOO) strategy to quantify feature importance per client, and integrates an adaptive differential privacy mechanism that enables clients to dynamically calibrate noise levels to optimize their individual utility. Our framework is designed to be scalable, budget-balanced, and robust to inference and poisoning attacks. Extensive experiments on benchmark datasets (MNIST, CIFAR-10, and CIFAR-100) demonstrate that OPUS-VFL significantly outperforms state-of-the-art VFL baselines in both efficiency and robustness. It reduces label inference attack success rates by up to 20%, increases feature inference reconstruction error (MSE) by over 30%, and achieves up to 25% higher incentives for clients that contribute meaningfully while respecting privacy and cost constraints. These results highlight the practicality and innovation of OPUS-VFL as a secure, fair, and performance-driven solution for real-world VFL.