optimal sequencing of individually rational contracts
Multiagent researchers have worked on the problem of determining optimal contracts between self-interested agents. In particular, Sandholm et al. [1,8] have both theoretically and experimentally studied the necessity and usefulness of different contract types under the assumption of individually myopically rational contracting. We study a variant of sequential contracting where the goal is to maximize social welfare through a fixed-length sequence of individually rational contracts. The space of possible contract sequences is exponential. We compare a greedy deterministic heuristic with a stochastic genetic algorithm based approach for this optimal sequential contract selection problem. We focus on sub-additive domains where individually rational contracts are feasible with side payments. We show that the GA-based approach consistently outperforms the deterministic heuristic by generating larger social welfare.
rational contracts genetic algorithms