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We consider moral hazard problems where a principal has access to rich monitoring data about an agent's action. Rather than focusing on optimal contracts (which are known to in general be complicated), we characterize the optimal rate at…

Theoretical Economics · Economics 2024-07-04 Mira Frick , Ryota Iijima , Yuhta Ishii

This paper considers dynamic moral hazard settings, in which the consequences of the agent's actions are not precisely understood. In a new continuous-time moral hazard model with drift ambiguity, the agent's unobservable action translates…

General Economics · Economics 2021-10-29 Martin Dumav

We study a variant of the principal-agent problem in which the principal does not directly observe the agent's effort outcome; rather, she gets a signal about the agent's action according to a variable information structure designed by a…

Computer Science and Game Theory · Computer Science 2024-09-06 Yakov Babichenko , Inbal Talgam-Cohen , Haifeng Xu , Konstantin Zabarnyi

A principal hires an agent to acquire soft information about an unknown state. Even though neither how the agent learns nor what the agent discovers are contractible, we show the principal is unconstrained as to what information the agent…

Theoretical Economics · Economics 2023-07-31 Mark Whitmeyer , Kun Zhang

We study a decision-maker's problem of finding optimal monetary incentive schemes for retention when faced with agents whose participation decisions (stochastically) depend on the incentive they receive. Our focus is on policies constrained…

Computer Science and Game Theory · Computer Science 2024-07-31 Daniel Freund , Chamsi Hssaine

We study a natural combinatorial single-principal multi-agent contract design problem, in which a principal motivates a team of agents to exert effort toward a given task. At the heart of our model is a reward function, which maps the agent…

Computer Science and Game Theory · Computer Science 2026-03-04 Paul Duetting , Tomer Ezra , Michal Feldman , Thomas Kesselheim

We are considering the problem of optimal portfolio delegation between an investor and a portfolio manager under a random default time. We focus on a novel variation of the Principal-Agent problem adapted to this framework. We address the…

Mathematical Finance · Quantitative Finance 2024-10-18 Alberto Gennaro , Thibaut Mastrolia

This paper studies continuous-time optimal contracting in a hierarchy problem which generalises the model of Sung (2015). The hierarchy is modeled by a series of interlinked principal-agent problems, leading to a sequence of Stackelberg…

Optimization and Control · Mathematics 2020-07-22 Emma Hubert

We investigate the impact of a regulation policy imposed on an agent exploiting a possibly renewable natural resource. We adopt a principal-agent model in which the Principal looks for a contract, i.e. taxes/compensations, leading the Agent…

Probability · Mathematics 2019-06-06 Idris Kharroubi , Thomas Lim , Thibaut Mastrolia

The recent work by Cvitani\'c, Possama\"i, and Touzi (2018) [9] presents a general approach for continuous-time principal-agent problems, through dynamic programming and second-order backward stochastic differential equations (BSDEs). In…

Optimization and Control · Mathematics 2025-06-16 Alessandro Chiusolo , Emma Hubert

This paper studies how uncertainty about problem difficulty shapes problem-solving strategies. I develop a dynamic model where an agent solves a problem by brainstorming approaches of unknown quality and allocating a fixed effort budget…

Theoretical Economics · Economics 2026-04-02 Nicholas Wu

The existence of optimal contracts of the principal-agent problem is a long-standing problem. According to the general framework in Cvitani\'c et al. [2], this existence can be derived from the existence of a classical solution to a…

Mathematical Finance · Quantitative Finance 2025-03-19 Xinfu Chen , Shuaijie Qian , Guan Qiao

An agent observes the set of available projects and proposes some, but not necessarily all, of them. A principal chooses one or none from the proposed set. We solve for a mechanism that minimizes the principal's worst-case regret. We…

Theoretical Economics · Economics 2023-09-04 Yingni Guo , Eran Shmaya

Principal-Agent (PA) problems describe a broad class of economic relationships characterized by misaligned incentives and asymmetric information. The Principal's problem is to find optimal incentives given the available information, e.g., a…

Multiagent Systems · Computer Science 2022-02-21 Tong Mu , Stephan Zheng , Alexander Trott

We study a setting in which a principal selects an agent to execute a collection of tasks according to a specified priority sequence. Agents, however, have their own individual priority sequences according to which they wish to execute the…

Computer Science and Game Theory · Computer Science 2024-10-30 Donya G. Dobakhshari , Lav R. Varshney , Vijay Gupta

We study a natural application of contract design in the context of sequential exploration problems. In our principal-agent setting, a search task is delegated to an agent. The agent performs a sequential exploration of $n$ boxes, suffers…

Computer Science and Game Theory · Computer Science 2025-01-27 Martin Hoefer , Conrad Schecker , Kevin Schewior

This paper proposes a novel continuous-time dynamic contract framework that has a risk-limiting capability. If a principal and an agent enter into such a contract, the principal can optimally manage its performance and risk with a guarantee…

Optimization and Control · Mathematics 2014-10-10 Insoon Yang , Duncan S. Callaway , Claire J. Tomlin

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

We study a dynamic stopping game between a principal and an agent. The agent is privately informed about his type. The principal learns about the agent's type from a noisy performance measure, which can be manipulated by the agent via a…

Theoretical Economics · Economics 2021-08-03 Mehmet Ekmekci , Leandro Gorno , Lucas Maestri , Jian Sun , Dong Wei

We study the combinatorial contract design problem, introduced and studied by Dutting et. al. (2021, 2022), in both the single and multi-agent settings. Prior work has examined the problem when the principal's utility function is submodular…

Computer Science and Game Theory · Computer Science 2023-08-16 Ramiro Deo-Campo Vuong , Shaddin Dughmi , Neel Patel , Aditya Prasad
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