@booklet {feldman-caocist2007,
	title = {Computing an Optimal Contract in Simple Technologies},
	howpublished = {Discussion Papers},
	year = {2007},
	month = {5},
	abstract = {We study an economic setting in which a principal motivates a team of strategic agents to exert costly effort toward the success of a joint project. The action taken by each agent is hidden and affects the (binary) outcome of the agent{\textquoteright}s individual task stochastically. A Boolean function, called technology, maps the individual tasks{\textquoteright} outcomes into the outcome of the whole project. The principal induces a Nash equilibrium on the agents{\textquoteright} actions through payments that are conditioned on the project{\textquoteright}s outcome (rather than the agents{\textquoteright} actual actions) and the main challenge is that of determining the Nash equilibrium that maximizes the principal{\textquoteright}s net utility, referred to as the optimal contract. Babaioff, Feldman and Nisan [1] suggest and study a basic combinatorial agency model for this setting. Here, we concentrate mainly on two extreme cases: the AND and OR technologies. Our analysis of the OR technology resolves an open question and disproves a conjecture raised in [1]. In particular, we show that while the AND case admits a polynomial-time algorithm, computing the optimal contract in the OR case is NP-hard. On the positive side, we devise an FPTAS for the OR case, which also sheds some light on optimal contract approximation of general technologies.},
	url = {/files/dp452.pdf},
	author = {Feldman, Yuval Emek and Michal}
}
