Multi-Agent Contracts

Abstract: 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 efforts to an expected reward of the principal. We seek to design computationally efficient algorithms for finding optimal (or near-optimal) linear contracts for reward functions that belong to the complement-free hierarchy. Our first main result gives constant-factor approximation algorithms for submodular and XOS reward functions, with value and demand oracles, respectively. It relies on an unconventional use of ``prices'' and (approximate) demand queries for selecting the set of agents that the principal should contract with, and exploits a novel scaling property of XOS functions and their marginals, which may be of independent interest. Our second main result is an $\Omega(\sqrt{n})$ impossibility for settings with $n$ agents and subadditive reward functions, even with demand oracle access. A striking feature of this impossibility is that it applies to subadditive functions that are constant-factor close to submodular. This presents a surprising departure from previous literature, e.g., on combinatorial auctions.