Combinatorial Agency of Threshold Functions
We study the combinatorial agency problem introduced by Babaioff, Feldman and Nisan  and resolve some open questions posed in their original paper. Our results include a characterization of the transition behavior for the class of threshold functions. This result confirms a conjecture of , and generalizes their results for the transition behavior for the OR technology and the AND technology. In addition to establishing a (tight) bound of 2 on the Price of Unaccountability (POU) for the OR technology for the general case of n > 2 agents (the initial paper established this for n = 2, an extended version establishes a bound of 2.5 for the general case), we establish that the POU is unbounded for all other threshold functions (the initial paper established this only for the case of the AND technology). We also obtain characterization results for certain compositions of anonymous technologies and establish an unbounded POU for these cases.
KeywordsNash Equilibrium Moral Hazard Transition Behavior Threshold Function Optimal Contract
Unable to display preview. Download preview PDF.
- 4.Alchian, A.A., Demsetz, H.: Production, information costs, and economic organization. The American Economic Review 62(5), 777–795 (1972)Google Scholar
- 5.Babaioff, M., Feldman, M., Nisan, N.: Combinatorial agency. In: ACM Conference on Electronic Commerce, pp. 18–28 (2006)Google Scholar
- 6.Babaioff, M., Feldman, M., Nisan, N.: Combinatorial agency. Full Version (2006)Google Scholar
- 9.Bolton, P., Dewatripont, M.: Contract Theory. MIT Press, Cambridge (2005)Google Scholar
- 10.Eidenbenz, R., Schmid, S.: Combinatorial agency with audits. In: IEEE International Conference on Game Theory for Networks, GameNets (2009)Google Scholar
- 12.Emek, Y., Haitner, I.: Combinatorial agency: The observable action model (2006) (manuscript)Google Scholar
- 13.Hermalin, B.E.: Toward an economic theory of leadership: Leading by example. The American Economic Review 88(5), 1188–1206 (1998)Google Scholar
- 15.Laffont, J.-J., Martimort, D.: The Theory of Incentives: The Principal-Agent Model. Princeton University Press, Princeton (2001)Google Scholar
- 16.von Ahn, L., Dabbish, L.: Labeling images with a computer game. In: Proceedings of the 2004 Conference on Human Factors in Computing Systems (CHI), pp. 319–326 (2004)Google Scholar