Regret-Minimizing Contracts: Agency Under Uncertainty
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arXiv
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| Auteurs principaux: | , , |
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| Format: | Preprint |
| Publié: |
2024
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| _version_ | 1866913238350823424 |
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| author | Bernasconi, Martino Castiglioni, Matteo Marchesi, Alberto |
| author_facet | Bernasconi, Martino Castiglioni, Matteo Marchesi, Alberto |
| contents | We study the fundamental problem of designing contracts in principal-agent problems under uncertainty. Previous works mostly addressed Bayesian settings in which principal's uncertainty is modeled as a probability distribution over agent's types. In this paper, we study a setting in which the principal has no distributional information about agent's type. In particular, in our setting, the principal only knows some uncertainty set defining possible agent's action costs. Thus, the principal takes a robust (adversarial) approach by trying to design contracts which minimize the (additive) regret: the maximum difference between what the principal could have obtained had them known agent's costs and what they actually get under the selected contract. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2402_13156 |
| institution | arXiv |
| publishDate | 2024 |
| record_format | arxiv |
| spellingShingle | Regret-Minimizing Contracts: Agency Under Uncertainty Bernasconi, Martino Castiglioni, Matteo Marchesi, Alberto Computer Science and Game Theory We study the fundamental problem of designing contracts in principal-agent problems under uncertainty. Previous works mostly addressed Bayesian settings in which principal's uncertainty is modeled as a probability distribution over agent's types. In this paper, we study a setting in which the principal has no distributional information about agent's type. In particular, in our setting, the principal only knows some uncertainty set defining possible agent's action costs. Thus, the principal takes a robust (adversarial) approach by trying to design contracts which minimize the (additive) regret: the maximum difference between what the principal could have obtained had them known agent's costs and what they actually get under the selected contract. |
| title | Regret-Minimizing Contracts: Agency Under Uncertainty |
| topic | Computer Science and Game Theory |
| url | https://arxiv.org/abs/2402.13156 |