Combinatorial Contracts Beyond Gross Substitutes

We study the combinatorial contracting problem of Dütting et al. [12], in which a principal seeks to incentivize an agent to take a set of costly actions. In their model, there is a binary outcome (the agent can succeed or fail), and the success probability and the costs depend on the set of actions taken. The optimal contract is linear, paying the agent an α fraction of the reward. For gross substitutes (GS) rewards and additive costs, they give a poly-time algorithm for finding the optimal contract. They use the properties of GS functions to argue that there are poly-many "critical values" of α, and that one can iterate through all of them efficiently in order to find the optimal contract.

In this work we study to which extent GS rewards and additive costs constitute a tractability frontier for combinatorial contracts. We present an algorithm that for any rewards and costs, enumerates all critical values, with poly-many demand queries (in the number of critical values). This implies the tractability of the optimal contract for any setting with poly-many critical values and efficient demand oracle. A direct corollary is a poly-time algorithm for the optimal contract in settings with supermodular rewards and submodular costs. We also study a natural class of matching-based instances with XOS rewards and additive costs. While the demand problem for this setting is tractable, we show that it admits an exponential number of critical values. On the positive side, we present (pseudo-) polynomial-time algorithms for two natural special cases of this setting. Our work unveils a profound connection to sensitivity analysis, and designates matching-based instances as a crucial focal point for gaining a deeper understanding of combinatorial contract settings.

• In concurrent work, also present an algorithm for enumerating all critical values, and use it to obtain an efficient algorithm for finding the optimal contract for supermodular rewards and additive costs. Their work was uploaded to arXiv on August 14, 2023.