Optimal Common Contract with Heterogeneous Agents

Authors

  • Shenke Xiao Tsinghua University
  • Zihe Wang Shanghai University of Finance and Economics
  • Mengjing Chen Tsinghua University
  • Pingzhong Tang Tsinghua University
  • Xiwang Yang Bytedance

DOI:

https://doi.org/10.1609/aaai.v34i05.6224

Abstract

We consider the principal-agent problem with heterogeneous agents. Previous works assume that the principal signs independent incentive contracts with every agent to make them invest more efforts on the tasks. However, in many circumstances, these contracts need to be identical for the sake of fairness. We investigate the optimal common contract problem. To our knowledge, this is the first attempt to consider this natural and important generalization. We first show this problem is NP-complete. Then we provide a dynamic programming algorithm to compute the optimal contract in O(n2m) time, where n,m are the number of agents and actions, under the assumption that the agents' cost functions obey increasing difference property. At last, we generalize the setting such that each agent can choose to directly produce a reward in [0,1]. We provide an O(log n)-approximate algorithm for this generalization.

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Published

2020-04-03

How to Cite

Xiao, S., Wang, Z., Chen, M., Tang, P., & Yang, X. (2020). Optimal Common Contract with Heterogeneous Agents. Proceedings of the AAAI Conference on Artificial Intelligence, 34(05), 7309-7316. https://doi.org/10.1609/aaai.v34i05.6224

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Section

AAAI Technical Track: Multiagent Systems