Project description
Expanding algorithmic contract theory for real world application
Contracts are economic tools by which a ‘principal’ incentivises ‘agents’ to exert paid effort on their behalf. Online contract negotiation has risen exponentially, including in areas like freelancing services and online courses. Furthermore, the scale and complexity of these contracts have increased tremendously, making the use of data both possible and critical in negotiations. Thus, an algorithmic approach to contract design is needed. Algorithmic contract theory, proposed in a pioneering 2006 paper, can meet this need. The ERC-funded FACT project, initiated by a co-author of the original paper, aims to advance algorithmic contract theory, enhancing its applicability to modern online contract negotiation and establishing a foundational theory for algorithmic contract design.
Objective
Algorithmic game theory (AGT) lies at the intersection of algorithms and incentives, offering a framework for the design of algorithms that provide incentives for collaboration in computational markets. AGT has played a pivotal role in shaping vital computing platforms. One of the most influential fields within AGT is algorithmic mechanism design, providing incentives for truthful revelation of private information.
An equally important intersection of algorithms and incentives arises in the design of algorithms incentivizing self-interested agents to exert costly effort in executing their tasks. Incentivizing effort was studied with great success in the economics field of contract theory.
As classic applications of effort incentivization move to computational platforms, including huge computational markets for freelancing services, marketing, and online courses, they grow in scale and complexity and become data-driven. In this evolving landscape, adopting an algorithmic approach to contract design is essential. This includes a language for analyzing the computational complexity of contracts in combinatorial settings, tools for studying simplicity-optimality tradeoffs, and a formalism for analyzing data-driven contracts.
In 2006, I co-authored the pioneering paper applying an algorithmic lens to contract design, marking the inception of the field of algorithmic contract theory (ACT) and foreshadowed future developments. However, it is only in recent years that the scientific landscape and computational platforms have matured to a stage where ACT has become a prominent field in AGT.
Preliminary research in ACT has been enlightening. However, the state of the art of ACT still lags far behind full applicability in Internet applications, largely due to disregard of crucial real-world aspects. The paramount goal of this project is to establish a foundational theory for algorithmic contract design that will bridge this gap and inform the design of real-world applications.
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CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.
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Project’s keywords as indicated by the project coordinator. Not to be confused with the EuroSciVoc taxonomy (Fields of science)
Programme(s)
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Multi-annual funding programmes that define the EU’s priorities for research and innovation.
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HORIZON.1.1 - European Research Council (ERC)
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Call for proposal
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(opens in new window) ERC-2024-COG
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69978 Tel Aviv
Israel
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