Related papers: Monitoring with Rich Data
We consider a general formulation of the random horizon Principal-Agent problem with a continuous payment and a lump-sum payment at termination. In the European version of the problem, the random horizon is chosen solely by the principal…
A principal hires an agent to work on a long-term project that culminates in a breakthrough or a breakdown. At each time, the agent privately chooses to work or shirk. Working increases the arrival rate of breakthroughs and decreases the…
A tenet of reinforcement learning is that the agent always observes rewards. However, this is not true in many realistic settings, e.g., a human observer may not always be available to provide rewards, sensors may be limited or…
We consider the problem faced by a service platform that needs to match limited supply with demand but also to learn the attributes of new users in order to match them better in the future. We introduce a benchmark model with heterogeneous…
A principal and an agent can launch a project under unanimous consent. Their individual payoffs from the project depend on an underlying state, and the agent privately knows his own preference. The principal can conduct a test to learn…
Overconservatism has long been recognized as a major issue with robust optimization, despite its key advantages of tractability, performance guarantee, and limited information. To address this issue, a new criterion is proposed that can…
A principal must decide between two options. Which one she prefers depends on the private information of two agents. One agent always prefers the first option; the other always prefers the second. Transfers are infeasible. One application…
We show that in delegation problems, a principal benefits from belief misalignment vis-\`a-vis an agent when the latter can flexibly acquire costly information. The agent optimally succumbs to confirmatory learning, leading him to favor the…
Motivated by the emergence of decentralized machine learning (ML) ecosystems, we study the delegation of data collection. Taking the field of contract theory as our starting point, we design optimal and near-optimal contracts that deal with…
Linear contracts are ubiquitous in practice, yet optimal contract theory often prescribes complex, nonlinear structures. We provide a distributional robustness justification for linear contracts. We study a principal-agent problem where the…
Public-Private Partnership (PPP) is a contract between a public entity and a consortium, in which the public outsources the construction and the maintenance of an equipment (hospital, university, prison...). One drawback of this contract is…
In practice, incentive providers (i.e., principals) often cannot observe the reward realizations of incentivized agents, which is in contrast to many principal-agent models that have been previously studied. This information asymmetry…
We study an optimal wage band problem in a competitive matching labor market where education signals worker ability. We prove uniqueness of the competitive signaling equilibrium under a general class of utility and profit functions and show…
Fairness is desirable yet challenging to achieve within multi-agent systems, especially when agents differ in latent traits that affect their abilities. This hidden heterogeneity often leads to unequal distributions of wealth, even when…
We consider the mechanism design problem of a principal allocating a single good to one of several agents without monetary transfers. Each agent desires the good and uses it to create value for the principal. We designate this value as the…
This work provides analysis of a variant of the Risk-Sharing Principal-Agent problem in a single period setting with additional constant lower and upper bounds on the wage paid to the Agent. First the effect of the extra constraints on…
Alignment with human preferences is commonly framed using a universal reward function, even though human preferences are inherently heterogeneous. We formalize this heterogeneity by introducing user types and examine the limits of the…
Following the recent literature on make take fees policies, we consider an exchange wishing to set a suitable contract with several market makers in order to improve trading quality on its platform. To do so, we use a principal-agent…
We study the robust regulation of contracts in moral hazard problems. A firm offers a contract to incentivise a worker protected by limited liability. A regulator restricts the set of permissible contracts to (i) improve efficiency and (ii)…
This work considers a repeated principal-agent bandit game, where the principal can only interact with her environment through the agent. The principal and the agent have misaligned objectives and the choice of action is only left to the…