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Principal-agent problems arise when one party acts on behalf of another, leading to conflicts of interest. The economic literature has extensively studied principal-agent problems, and recent work has extended this to more complex scenarios…

Artificial Intelligence · Computer Science 2024-01-02 Omer Ben-Porat , Yishay Mansour , Michal Moshkovitz , Boaz Taitler

In applications such as participatory sensing and crowd sensing, self-interested agents exert costly effort towards achieving an objective for the system operator. We study such a setup where a principal incentivizes multiple agents of…

Signal Processing · Electrical Eng. & Systems 2022-05-11 Nayara Aguiar , Parv Venkitasubramaniam , Vijay Gupta

We study the optimal design of electricity contracts among a population of consumers with different needs. This question is tackled within the framework of Principal-Agent problems in presence of adverse selection. The particular features…

Optimization and Control · Mathematics 2019-09-17 Clémence Alasseur , Ivar Ekeland , Romuald Elie , Nicolás Hernández Santibáñez , Dylan Possamaï

We study a dynamic contracting problem with multiple agents and limited commitment. A principal seeks to screen efficient agents using one-period contracts, but is tempted to revise contract terms upon knowing an agent's type. Alterations…

Theoretical Economics · Economics 2025-03-24 Mehmet Ekmekci , Lucas Maestri , Dong Wei

This paper characterises optimal incentive schemes for ESG disclosure in a continuous-time principal-agent setting. We model a risk-averse principal (e.g., a platform or standard-setter) contracting with a team of heterogeneous agents whose…

General Economics · Economics 2026-04-28 Imen Ben Tahar , Dylan Possamaï , Xiaolu Tan

The increasing deployment of AI is shaping the future landscape of the internet, which is set to become an integrated ecosystem of AI agents. Orchestrating the interaction among AI agents necessitates decentralized, self-sustaining…

Computer Science and Game Theory · Computer Science 2024-10-08 Dima Ivanov , Paul Dütting , Inbal Talgam-Cohen , Tonghan Wang , David C. Parkes

In this paper, we address three Principal--Agent problems in a moral hazard context and show that they are connected. We start by studying the problem of Principal with multiple Agents in cooperation. The term cooperation is manifested here…

Optimization and Control · Mathematics 2024-10-23 Mao Fabrice Djete

A principal delegates a project to a team $S$ from a pool of $n$ agents. The project's value if all agents in $S$ exert costly effort is $f(S)$. To incentivize the agents to participate, the principal assigns each agent $i\in S$ a share…

Computer Science and Game Theory · Computer Science 2025-04-29 Gil Aharoni , Martin Hoefer , Inbal Talgam-Cohen

Agents attempt to maximize expected profits earned by selling multiple units of a perishable product where their revenue streams are affected by the prices they quote as well as the distribution of other prices quoted in the market by other…

Trading and Market Microstructure · Quantitative Finance 2025-04-16 Ryan Donnelly , Zi Li

An employer contracts with a worker to incentivize efforts whose productivity depends on ability; the worker then enters a market that pays him contingent on ability evaluation. With non-additive monitoring technology, the interdependence…

Theoretical Economics · Economics 2025-07-31 Tan Gan , Hongcheng Li

In revenue maximization of selling a digital product in a social network, the utility of an agent is often considered to have two parts: a private valuation, and linearly additive influences from other agents. We study the incomplete…

Computer Science and Game Theory · Computer Science 2011-09-27 Wei Chen , Pinyan Lu , Xiaorui Sun , Bo Tang , Yajun Wang , Zeyuan Allen Zhu

Firms have access to abundant data on market participants. They use these data to target contracts to agents with specific characteristics, and describe these contracts in opaque terms. In response to such practices, recent proposed…

Theoretical Economics · Economics 2023-02-01 Andreas Haupt , Zoe Hitzig

This paper studies optimal consensus tracking problem of heterogeneous linear multi-agent systems. By introducing tracking error dynamics, the optimal tracking problem is reformulated as finding a Nash-equilibrium solution of a multi-player…

Optimization and Control · Mathematics 2019-05-21 Jilie Zhang , Zhanshan Wang , Hongwei Zhang

Can a principal still offer optimal dynamic contracts that are linear in end-of-period outcomes when the agent controls a process that exhibits memory? We provide a positive answer by considering a general Gaussian setting where the output…

Optimization and Control · Mathematics 2022-09-23 Eduardo Abi Jaber , Stéphane Villeneuve

Social dilemmas present a significant challenge in multi-agent cooperation because individuals are incentivised to behave in ways that undermine socially optimal outcomes. Consequently, self-interested agents often avoid collective…

Computer Science and Game Theory · Computer Science 2024-08-02 Richard Willis , Yali Du , Joel Z Leibo , Michael Luck

The large majority of risk-sharing transactions involve few agents, each of whom can heavily influence the structure and the prices of securities. This paper proposes a game where agents' strategic sets consist of all possible sharing…

Risk Management · Quantitative Finance 2016-07-11 Michail Anthropelos , Constantinos Kardaras

Due to the lack of coordination, it is unlikely that the selfish players of a strategic game reach a socially good state. A possible way to cope with selfishness is to compute a desired outcome (if it is tractable) and impose it. However…

Computer Science and Game Theory · Computer Science 2010-12-20 Bruno Escoffier , Laurent Gourvès , Jérôme Monnot

In this paper we show how the relaxation techniques can be used to establish the existence of an optimal contract in presence of information asymmetry. The method we illustrate was initially motivated by the problem of designing optimal…

Mathematical Finance · Quantitative Finance 2023-07-17 Guillermo Alonso Alvarez , Sergey Nadtochiy

In this paper we consider a principal agent problem where the agent is allowed to quit, by incurring a cost. When the current agent quits the job, the principal will hire a new one, possibly with a different type. We characterize the…

Optimization and Control · Mathematics 2024-09-04 Jianfeng Zhang , Zimu Zhu

This work studies the online contract design problem. The principal's goal is to learn the optimal contract that maximizes her utility through repeated interactions, without prior knowledge of the agent's type (i.e., the agent's cost and…

Computer Science and Game Theory · Computer Science 2025-06-11 Shiliang Zuo