Multiagent Incentive Contracts
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Author | : Qi Luo |
Publisher | : |
Total Pages | : 17 |
Release | : 2019 |
Genre | : |
ISBN | : |
Incentive contracts with multiple agents is a classical decentralized decision-making problem with asymmetric information. Contract design aims to incentivize noncooperative agents to act in the principal's interest over a planning horizon. We extend the single-agent incentive contract to a multiagent setting with history-dependent terminal conditions. Our contributions include: (a) Finding sufficient conditions for the existence of optimal multiagent incentive contracts and conditions under which they form a unique Nash Equilibrium; (b) Showing that the optimal multiagent incentive contracts can be solved by a Hamilton-Jacobi-Bellman (HJB) equation with equilibrium constraints; (c) Proposing a backward iterative algorithm to solve the problem.
Author | : Bengt Holmstrom |
Publisher | : |
Total Pages | : 60 |
Release | : 1990 |
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Author | : Jonathan C. Glover |
Publisher | : |
Total Pages | : 73 |
Release | : 2014 |
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This monograph presents existing and new research on three approaches to multiagent incentives: simpler mechanisms, robust mechanisms, and implicit contracts. The goal of all three approaches is to find theories that better explain observed institutions than the standard approach has.
Author | : Yaping Shan |
Publisher | : |
Total Pages | : 80 |
Release | : 2012 |
Genre | : Merit pay |
ISBN | : |
In this multiagent problem, each agents payment depends not only on his own performance, but is affected by the other agents performance as well. Similar to the single-agent case, an agent is rewarded when he succeeds, and his payment decreases over time when both agents fail. Regarding how an agents payment relates to his coworkers performance, I find that the optimal incentive regime is a function of the way in which agents efforts interact with one another: relative-performance evaluation is used when their efforts are substitutes whereas joint-performance evaluation is used when their efforts are complements. This result sheds new light on the notion of optimal incentive regimes, an issue that has been widely discussed in multi-agent incentive problems.
Author | : Yehui Zhang |
Publisher | : |
Total Pages | : 0 |
Release | : 2023 |
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ISBN | : |
The increasing demand for aviation complex products makes complex product manufacturers pay more attention to delivery efficiency, and the efficiency and effect of delivery problems are the key factors that restrict the delivery efficiency. This study aims to design a long-term effective incentive contract, which stimulates the subjective initiative of each technical business department to deal with delivery problems so as to improve delivery efficiency. We consider the behavioral characteristics of each technical business department (fairness preference, interrelationship diversity, technical capability, etc.) to expand the benchmark incentive model. The multi-stage incentive mechanism which combines the explicit incentives and implicit incentives are developed to explore the optimal delivery strategies based on a benchmark model. The results show that the incentive contracts can improve delivery efficiency and benefit delivery centers and technical business departments. The delivery decisions of the department are influenced by the closeness of department relationships and the fairness of assignment, and the departments tend to pay more effort in tasks with high relative importance and low effort cost. When the relative importance of tasks is equal to the ratio of marginal cost, a weak incentive zone in the delivery incentive contract is existed. The incentive effect of reputation effect is obvious except for the last stage. Base on the designed incentive contracts, the subjective initiative of the participants can be effectively stimulated to empower complex product delivery.
Author | : Priyodorshi Banerjee |
Publisher | : |
Total Pages | : 35 |
Release | : 2008 |
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We study contracting in a principal multi-agent moral hazard problem where agents receive private information on the realisation of a common productivity shock after contracts are signed, but before actions are taken. Joint performance evaluation schemes can be optimal when private information is of sufficiently high quality, while relative performance evaluation schemes are optimal with poor quality private signals. Interdependent incentive schemes create an endogenous externality between agents, the nature of which depends on the structure of the evaluation scheme. Joint performance evaluation schemes generate endogenous complementarities in the presence of correlated private information, and so may be optimal.
Author | : Joel S. Demski |
Publisher | : |
Total Pages | : 58 |
Release | : 1983 |
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Author | : United States. General Accounting Office |
Publisher | : |
Total Pages | : 24 |
Release | : 1987 |
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Author | : Jacques Paul Lawarrée |
Publisher | : |
Total Pages | : 418 |
Release | : 1990 |
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Author | : Jaeyoung Sung |
Publisher | : |
Total Pages | : 22 |
Release | : 2008 |
Genre | : |
ISBN | : |
We present a continuous-time contracting model under moral hazard with many agents. The principal contracts many agents as a team, and they jointly produce correlated outcomes. We show the optimal contract for each agent is linear in outcomes of all other agents as well as his/her own. The structure of the optimal contract strikingly reveals that the optimal aggregate performance measure in general can be orthogonally decomposed into two statistics: one is a sufficient statistic, and the other a non-sufficient statistic. As a consequence, the optimal aggregate performance measure in general is not a sufficient statistic, except when the principal is risk neutral. We further discuss agents' optimal effort choices using a quot;quadratic-costquot; example, which also strikingly suggests that team contracts sometimes provide lower-powered effort incentives than individually separate contracts do.