Algorithmic contract theory and contractible contracts

Markets are an ancient tool for allocating goods, but they are also a tool for the allocating effort. The principal-agent model (contract design) studies such issues. Multiple principals simultaneously interacting with the same agent(s) are represented by a model called “common agency.” Classically, contract theory restricts attention to simple contracts that specify the payment of a principal to an agent conditioned on the agent’s actions or on the obtained outcome. In this talk Ron Lavi (Bath) will describe “VCG contracts,” a type of “contractible contracts” – contracts where the payment of a principal to an agent can also be conditioned on details specified in contracts that other principals submit. The main results show that VCG contracts significantly improve social efficiency relative to classic contracts. Since contractible contracts are reminiscent of smart contracts, a more formal exploration of the connections between the two suggests itself as a future research direction.

This is joint work with Tal Alon, Inbal Talgam-Cohen, and Elisheva Shamash.

About the presenter

Ron is a reader (associate professor) at the economics department, University of Bath, UK. His research focuses on subjects on the border of economics and computation, mainly algorithmic game theory, auction theory, and the efficient design of economic mechanisms. He completed his doctoral studies in computer science at the Hebrew University, Israel, and his postdoctoral studies at the California Institute of Technology. He was a faculty member at Technion, a visiting scholar at UC Berkeley, and a consultant / year-long academic visitor at Google, Microsoft research, and Yahoo! Labs.

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