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Inbal Talgam-Cohen

Publications and source records attributed to Inbal Talgam-Cohen.

At least 19 recordsLinked to original sources

Ex-ante versus Ex-post: Egalitarian Facility Location Mechanism Design

We study the facility location mechanism design problem where $n$ strategic agents report locations in Euclidean space and the mechanism outputs a single facility location. Each agent's cost is its distance from the facility, and our objective is to minimize the egalitarian cost, i.e., the maximum agent cost, in a strategyproof way. The optimal deterministic approximation ratio is $2$, achieved by any dictator mechanism. We study the power of randomized strategyproof-in-expectation mechanisms. Prior work has focused on ex-post evaluation, defined as the expected maximum agent cost. We instead study ex-ante evaluation, defined as the maximum expected agent cost, which is naturally aligned with strategyproofness in expectation. We establish the following results: (1) Low dimensions: Strict ex-ante vs. ex-post separation. In $\mathbb{R}$, we give a simple strategyproof mechanism achieving the optimal ex-ante approximation ratio of $1$. In $\mathbb{R}^2$, we design the "Random Rotated Corner" mechanism, with ex-ante approximation ratio at most $1.598$, breaking the deterministic barrier. For the ex-post objective, we prove a lower bound of $1.605$, yielding a strict separation in $\mathbb{R}^2$. (2) High dimensions: Impossibility. In $\mathbb{R}^d$ for $d \gg 1$, we show that no strategyproof-in-expectation mechanism improves on the deterministic dictator mechanism beyond $o_d(1)$. Thus neither ex-post nor ex-ante evaluation yields improved fairness guarantees in high dimensions. An implication is that the "Random Rotation Coordinate-Wise Median" (RRCWM), currently the best known mechanism for the utilitarian objective, is also best possible for the egalitarian objective in high dimension: we show it achieves an approximation ratio of $2$ for both ex-post and ex-ante objectives in $\mathbb{R}^d$ for every $d \ge 1$.

cs.GT

Teaming Up with AI: Coordination and Cooperation

Successful diffusion of AI in the workforce hinges on the economic value that AI brings to human endeavors. Bringing AI into the workforce is more than deploying a powerful new technology -- it is launching a new form of collaboration. Each human worker is now endowed with a team of AI agents; work can be delegated to these agents, and the role of the human shifts towards managing and monitoring. How can we maximize the economic value from collaboration with AI in the workforce? How can we make it a "true" collaboration that empowers human workers rather than replacing them? We take an approach that combines the fields of theoretical computer science and economics, highlighting the potential of algorithmic tools grounded in economic principles to improve the effectiveness of human-AI collective work. We consider two tiers of tools: (1) tools for better coordination, via algorithmic management of interdependencies; (2) tools for better cooperation, via contractual incentive alignment. We show how a principled approach based on algorithmic and economic research enhances both coordination and cooperation, charting a pathway for future research to inform AI markets.

cs.GT

Optimal Auction Design for Constrained Buyers

We study single-parameter, multi-buyer auctions in which buyers are subject to constraints that affect their bidding strategy. Such constraints arise in many real-world auction settings and fundamentally alter the auction design space. As a consequence, the Revelation Principle, Envelope Theorem, and Myerson's Lemma no longer hold. In this paper we focus on a large family of buyer constraints where the buyers are restricted in the manner in which they can bid or spend their budget, but do not have a hard budget cap. These include the common constraints of no-overbidding, ex-post individual rationality, and stagewise individual rationality. We ask whether the seller can leverage the buyers' constraints to obtain improved payoff. Our main finding is a separation between \emph{revenue-aligned} seller objectives (e.g., revenue maximization, welfare, or any linear combination of the two), and \emph{consumer-aligned} seller objectives, which are objectives where the seller prefers \emph{lower} payments, e.g.~to maximize consumer surplus. For revenue-aligned objectives, we establish a unified theory for all constraints in the family, which parallels Myerson's theory of optimal auctions for unconstrained buyers. We develop a new measure-theoretic technique to show that Myerson-style auctions remain optimal, despite the altered design space and failure of the classical theory's central tenets. For consumer-aligned objectives, the picture is different: we show that the seller can leverage the buyers' strategic limitations to strictly outperform classically incentive compatible mechanisms. We design an optimal deterministic auction for a wide class of instances, focusing in particular on buyers who cannot tolerate temporary debt.

cs.GT

ZEBRA: Zero-shot Budgeted Resource Allocation for LLM Orchestration

As autonomous agents increasingly execute end-to-end tasks under fixed monetary budgets, the pressing open question shifts from whether the budget is respected, to how to spend it effectively. Existing budget-aware methods typically control reasoning step-by-step within a single agent, or learn resource allocation policies via RL. None address how to split a budget across the composing phases of a multi-agent pipeline at inference time. We propose ZEBRA, a zero-shot framework that reduces multi-phase budget allocation to a continuous nonlinear knapsack problem: an LLM controller estimates per-phase utility curves, and a water-filling search on the Lagrange multiplier returns the per-phase split. Additive and multiplicative aggregations are unified under the same solver. On a $150$-task APPS coding benchmark, both ZEBRA variants outperform LLM-direct (budget allocation directly by an LLM) on every aggregate metric. At a budget of $\alpha = 0.5$ of the unconstrained spend, ZEBRA recovers $94.4\%$ of unconstrained quality, versus $88.1\%$ for LLM-direct. The advantage is statistically significant and transfers beyond coding: on a $3$-phase HotpotQA pipeline, ZEBRA beats LLM-direct by $14.3$pp, with allocations empirically robust to curve-estimation noise. On HotpotQA, ZEBRA arrives at a different budget split (near-balanced) compared to the APPS one (skewed towards a refinement phase), showing adaptation to the pipeline structure. More broadly, we show that lightweight algorithmic guidance at inference time can improve the economic behavior of autonomous multi-agent systems.

cs.LG

Adaptive Contracts for Cost-Effective AI Delegation

When organizations delegate text generation tasks to AI providers via pay-for-performance contracts, expected payments rise when evaluation is noisy. As evaluation methods become more elaborate, the economic benefits of decreased noise are often overshadowed by increased evaluation costs. In this work, we introduce adaptive contracts for AI delegation, which allow detailed evaluation to be performed selectively after observing an initial coarse signal in order to conserve resources. We make three sets of contributions: First, we provide efficient algorithms for computing optimal adaptive contracts under natural assumptions or when core problem dimensions are small, and prove hardness of approximation in the general unstructured case. We then formulate alternative models of randomized adaptive contracts and discuss their benefits and limitations. Finally, we empirically demonstrate the benefits of adaptivity over non-adaptive baselines using question-answering and code-generation datasets.

cs.GT

Stochastic Knapsack: Semi-Adaptivity Gaps and Improved Approximation

In stochastic combinatorial optimization, algorithms differ in their adaptivity: whether or not they query realized randomness and adapt to it. Dean et al. (FOCS '04) formalize the adaptivity gap, which compares the performance of fully adaptive policies to that of non-adaptive ones. We revisit the fundamental Stochastic Knapsack problem of Dean et al., where items have deterministic values and independent stochastic sizes. A policy packs items sequentially, stopping at the first knapsack overflow or before. We focus on the challenging risky variant, in which an overflow forfeits all accumulated value, and study the problem through the lens of semi-adaptivity: We measure the power of $k$ adaptive queries for constant $k$ through the notions of $0$-$k$ semi-adaptivity gap (the gap between $k$-semi-adaptive and non-adaptive policies), and $k$-$n$ semi-adaptivity gap (between fully adaptive and $k$-semi-adaptive policies). Our first contribution is to improve the classic results of Dean et al. by giving tighter upper and lower bounds on the adaptivity gap. Our second contribution is a smoother interpolation between non-adaptive and fully-adaptive policies, with the rationale that when full adaptivity is unrealistic (due to its complexity or query cost), limited adaptivity may be a desirable middle ground. We quantify the $1$-$n$ and $k$-$n$ semi-adaptivity gaps, showing how well $k$ queries approximate the fully-adaptive policy. We complement these bounds by quantifying the $0$-$1$ semi-adaptivity gap, i.e., the improvement from investing in a single query over no adaptivity. As part of our analysis, we develop a 3-step "Simplify-Equalize-Optimize" approach to analyzing adaptive decision trees, with possible applications to the study of semi-adaptivity in additional stochastic combinatorial optimization problems.

cs.DS

Online Contract Design

We initiate the study of online contracts, which integrate the game-theoretic considerations of economic contract theory, with the algorithmic and informational challenges of online algorithm design. Our starting point is the classic online setting with preemption of Buchbinder et al. [SODA'15], in which a hiring principal faces a sequence of adversarial agent arrivals. Upon arrival, the principal must decide whether to tentatively accept the agent to their team, and whether to dismiss previous tentative choices. Dismissal is irrevocable, giving the setting its online decision-making flavor. In our setting, the agents are rational players: once the team is finalized, a game is played where the principal offers contracts (performance-based payment schemes), and each agent decides whether or not to work. Working agents reward the principal, and the goal is to choose a team that maximizes the principal's utility. Our main positive result is a 1/2-competitive algorithm when agent rewards are additive, which matches the best-possible competitive ratio. Our algorithm is randomized and this is necessary, as we show that no deterministic algorithm can attain a bounded competitive ratio. Moreover, if agent rewards are allowed to exhibit combinatorial structure known as XOS, even randomized algorithms might fail. En route to our competitive algorithm, we develop the technique of balance points, which can be useful for further exploration of online contracts in the adversarial model.

cs.GT

Approximating Pandora's Knapsack via Simple Policies

We introduce Pandora's Knapsack: a hybrid between the classic stochastic knapsack problem [Dean et al., 2008] and Pandora's box [Weitzman, 1979]. As in stochastic knapsack, items have sizes drawn from known distributions, and items that fit within a knapsack contribute to the total value. As in Pandora, every item $i$ comes in a box that costs $c_i$ to open. What distinguishes our problem is that the size is revealed only after opening the box and paying the cost. We study the power of simple decision-making policies to approximate Pandora's Knapsack, along two complexity axes: (i)~knowledge of size distributions, and (ii)~adaptivity. We show that adding costs to stochastic knapsack completely changes the algorithmic landscape, and policies must now be complex along both axes to be approximately-optimal. We complement these impossibilities by showing that with full distributional information and slightly more adaptivity---allowing adaptive skipping of items---a constant approximation can be recovered. Our analysis reveals an economic quantity, namely ROI (return-on-investment, defined as the jobs' minimum utility over cost), which smoothly characterizes the performance of simple policies. Across a hierarchy of increasingly adaptive policies, we establish near-tight adaptivity gaps all governed by ROI. To demonstrate the importance of the ROI parameter in characterizing simple policies, we revisit Pandora's Box, and show that return-on-investment exactly captures the adaptivity gap in this classic problem as well. As a corollary, we get that simple policies are approximately-optimal provided the ROI is sufficiently large.

cs.GT

An Algorithm-to-Contract Framework without Demand Queries

Consider costly and time-consuming tasks that add up to the success of a project, and must be fitted into a given time-frame. This is an instance of the classic budgeted maximization (knapsack) problem, which admits an FPTAS. Now assume an agent is performing these tasks on behalf of a principal, who is the one to reap the rewards if the project succeeds. The principal must design a contract to incentivize the agent. Is there still an approximation scheme? In this work we lay the foundations for an algorithm-to-contract framework, which transforms algorithms for combinatorial problems to handle contract design problems subject to the same combinatorial constraints. Our approach diverges from previous works in avoiding the assumption of demand oracle access. As an example, for budgeted maximization, we show how to "lift" the classic FPTAS to the best-possible (approximately-IC) FPTAS for the contract problem. We establish this through our local-to-global framework, in which the local step is to approximately solve a two-sided strengthened variant of the demand problem. The global step then utilizes the local one to find the approximately optimal contract. We apply our framework to a host of combinatorial constraints: multi-dimensional budgets, budgeted matroid, and budgeted matching constraints. In all cases we essentially match the best purely algorithmic approximation. Separately, we also develop a method for multi-agent contract settings. Our method yields the first approximation schemes for multi-agent contract settings that go beyond additive reward functions.

cs.GT

Multi-Project Contracts

We study a new class of contract design problems where a principal delegates the execution of multiple projects to a set of agents. The principal's expected reward from each project is a combinatorial function of the agents working on it. Each agent has limited capacity and can work on at most one project, and the agents are heterogeneous, with different costs and contributions for participating in different projects. The main challenge of the principal is to decide how to allocate the agents to projects when the number of projects grows in scale. We analyze this problem under different assumptions on the structure of the expected reward functions. As our main result, for XOS functions we show how to derive a constant approximation to the optimal multi-project contract in polynomial time, given access to value and demand oracles. Along the way (and of possible independent interest), we develop approximate demand queries for \emph{capped} subadditive functions, by reducing to demand queries for the original functions. Our work paves the way to combinatorial contract design in richer settings.

cs.GT

Dynamic Rental Games with Stagewise Individual Rationality

We study \emph{rental games} -- a single-parameter dynamic mechanism design problem, in which a designer rents out an indivisible asset over $n$ days. Each day, an agent arrives with a private valuation per day of rental, drawn from that day's (known) distribution. The designer can either rent out the asset to the current agent for any number of remaining days, charging them a (possibly different) payment per day, or turn the agent away. Agents who arrive when the asset is not available are turned away. A defining feature of our dynamic model is that agents are \emph{stagewise-IR} (individually rational), meaning they reject any rental agreement that results in temporary negative utility, even if their final utility is positive. We ask whether and under which economic objectives it is useful for the designer to exploit the stagewise-IR nature of the agents. We show that an optimal rental mechanism can be modeled as a sequence of dynamic auctions with seller costs. However, the stagewise-IR behavior of the agents makes these auctions quite different from classical single-parameter auctions: Myerson's Lemma does not apply, and indeed we show that truthful mechanisms are not necessarily monotone, and payments do not necessarily follow Myerson's unique payment rule. We develop alternative characterizations of optimal mechanisms under several classes of economic objectives, including generalizations of welfare, revenue and consumer surplus. These characterizations allow us to use Myerson's unique payment rule in several cases, and for the other cases we develop optimal mechanisms from scratch. Our work shows that rental games raise interesting questions even in the single-parameter regime.

cs.GT

Welfare and Beyond in Multi-Agent Contracts

A principal delegates a project to a team $S$ from a pool of $n$ agents. The project's value if all agents in $S$ exert costly effort is $f(S)$. To incentivize the agents to participate, the principal assigns each agent $i\in S$ a share $\rho_i\in [0,1]$ of the project's final value (i.e., designs $n$ linear contracts). The shares must be feasible -- their sum should not exceed $1$. It is well-understood how to design these contracts to maximize the principal's own expected utility, but what if the goal is to coordinate the agents toward maximizing social welfare? We initiate a systematic study of multi-agent contract design with objectives beyond principal's utility, including welfare maximization, for various classes of value functions $f$. Our exploration reveals an arguably surprising fact: If $f$ is up to XOS in the complement-free hierarchy of functions, then the optimal principal's utility is a constant-fraction of the optimal welfare. This is in stark contrast to the much larger welfare-utility gaps in auction design, and no longer holds above XOS in the hierarchy, where the gap can be unbounded. A constant bound on the welfare-utility gap immediately implies that existing algorithms for designing contracts with approximately-optimal principal's utility also guarantee approximately-optimal welfare. The downside of reducing welfare to utility is the loss of large constants. To obtain better guarantees, we develop polynomial-time algorithms directly for welfare, for different classes of value functions. These include a tight $2$-approximation to the optimal welfare for symmetric XOS functions. Finally, we extend our analysis beyond welfare to the project's value under general feasibility constraints. Our results immediately translate to budgeted welfare and utility.

cs.GT

Algorithmic Contract Theory: A Survey

A contract is an economic tool used by a principal to incentivize one or more agents to exert effort on her behalf, by defining payments based on observable performance measures. A key challenge addressed by contracts -- known in economics as moral hazard -- is that, absent a properly set up contract, agents might engage in actions that are not in the principal's best interest. Another common feature of contracts is limited liability, which means that payments can go only from the principal -- who has the deep pocket -- to the agents. With classic applications of contract theory moving online, growing in scale, and becoming more data-driven, tools from contract theory become increasingly important for incentive-aware algorithm design. At the same time, algorithm design offers a whole new toolbox for reasoning about contracts, ranging from additional tools for studying the tradeoff between simple and optimal contracts, through a language for discussing the computational complexity of contracts in combinatorial settings, to a formalism for analyzing data-driven contracts. This survey aims to provide a computer science-friendly introduction to the basic concepts of contract theory. We give an overview of the emerging field of "algorithmic contract theory" and highlight work that showcases the potential for interaction between the two areas. We also discuss avenues for future research.

cs.GT

Principal-Agent Reinforcement Learning: Orchestrating AI Agents with Contracts

The increasing deployment of AI is shaping the future landscape of the internet, which is set to become an integrated ecosystem of AI agents. Orchestrating the interaction among AI agents necessitates decentralized, self-sustaining mechanisms that harmonize the tension between individual interests and social welfare. In this paper we tackle this challenge by synergizing reinforcement learning with principal-agent theory from economics. Taken separately, the former allows unrealistic freedom of intervention, while the latter struggles to scale in sequential settings. Combining them achieves the best of both worlds. We propose a framework where a principal guides an agent in a Markov Decision Process (MDP) using a series of contracts, which specify payments by the principal based on observable outcomes of the agent's actions. We present and analyze a meta-algorithm that iteratively optimizes the policies of the principal and agent, showing its equivalence to a contraction operator on the principal's Q-function, and its convergence to subgame-perfect equilibrium. We then scale our algorithm with deep Q-learning and analyze its convergence in the presence of approximation error, both theoretically and through experiments with randomly generated binary game-trees. Extending our framework to multiple agents, we apply our methodology to the combinatorial Coin Game. Addressing this multi-agent sequential social dilemma is a promising first step toward scaling our approach to more complex, real-world instances.

cs.GT

Incentivizing Quality Text Generation via Statistical Contracts

While the success of large language models (LLMs) increases demand for machine-generated text, current pay-per-token pricing schemes create a misalignment of incentives known in economics as moral hazard: Text-generating agents have strong incentive to cut costs by preferring a cheaper model over the cutting-edge one, and this can be done "behind the scenes" since the agent performs inference internally. In this work, we approach this issue from an economic perspective, by proposing a pay-for-performance, contract-based framework for incentivizing quality. We study a principal-agent game where the agent generates text using costly inference, and the contract determines the principal's payment for the text according to an automated quality evaluation. Since standard contract theory is inapplicable when internal inference costs are unknown, we introduce cost-robust contracts. As our main theoretical contribution, we characterize optimal cost-robust contracts through a direct correspondence to optimal composite hypothesis tests from statistics, generalizing a result of Saig et al. (NeurIPS'23). We evaluate our framework empirically by deriving contracts for a range of objectives and LLM evaluation benchmarks, and find that cost-robust contracts sacrifice only a marginal increase in objective value compared to their cost-aware counterparts.

cs.GT

Statistically Truthful Auctions via Acceptance Rule

Auctions are key for maximizing sellers' revenue and ensuring truthful bidding among buyers. Recently, an approach known as differentiable economics based on machine learning (ML) has shown promise in learning powerful auction mechanisms for multiple items and participants. However, this approach has no guarantee of strategy-proofness at test time. Strategy-proofness is crucial as it ensures that buyers are incentivized to bid their true valuations, leading to optimal and fair auction outcomes without the risk of manipulation. In this work, we propose a formulation of statistical strategy-proofness for auction mechanisms. Specifically, we offer a method that bounds the regret -- quantifying deviation from truthful bidding -- below a pre-specified level with high probability. Building upon conformal prediction techniques, we develop an auction acceptance rule that leverages regret predictions to guarantee that the data-driven auction mechanism meets the statistical strategy-proofness requirement with high probability. Our method -- Statistically Truthful Auctions via Acceptance Rule (STAR) -- represents a practical middle-ground between two extremes: enforcing truthfulness -- zero-regret -- at the cost of significant revenue loss, and naively using ML to construct auctions with the hope of attaining low regret, with no test-time guarantees.

cs.GT

MAC Advice for Facility Location Mechanism Design

Algorithms with predictions have attracted much attention in the last years across various domains, including variants of facility location, as a way to surpass traditional worst-case analyses. We study the $k$-facility location mechanism design problem, where the $n$ agents are strategic and might misreport their location. Unlike previous models, where predictions are for the $k$ optimal facility locations, we receive $n$ predictions for the locations of each of the agents. However, these predictions are only "mostly" and "approximately" correct (or MAC for short) -- i.e., some $\delta$-fraction of the predicted locations are allowed to be arbitrarily incorrect, and the remainder of the predictions are allowed to be correct up to an $\varepsilon$-error. We make no assumption on the independence of the errors. Can such predictions allow us to beat the current best bounds for strategyproof facility location? We show that the $1$-median (geometric median) of a set of points is naturally robust under corruptions, which leads to an algorithm for single-facility location with MAC predictions. We extend the robustness result to a "balanced" variant of the $k$ facilities case. Without balancedness, we show that robustness completely breaks down, even for the setting of $k=2$ facilities on a line. For this "unbalanced" setting, we devise a truthful random mechanism that outperforms the best known result of Lu et al. [2010], which does not use predictions. En route, we introduce the problem of "second" facility location (when the first facility's location is already fixed). Our findings on the robustness of the $1$-median and more generally $k$-medians may be of independent interest, as quantitative versions of classic breakdown-point results in robust statistics.

cs.GT

Contracting with a Learning Agent

Many real-life contractual relations differ completely from the clean, static model at the heart of principal-agent theory. Typically, they involve repeated strategic interactions of the principal and agent, taking place under uncertainty and over time. While appealing in theory, players seldom use complex dynamic strategies in practice, often preferring to circumvent complexity and approach uncertainty through learning. We initiate the study of repeated contracts with a learning agent, focusing on agents who achieve no-regret outcomes. Optimizing against a no-regret agent is a known open problem in general games; we achieve an optimal solution to this problem for a canonical contract setting, in which the agent's choice among multiple actions leads to success/failure. The solution has a surprisingly simple structure: for some $α> 0$, initially offer the agent a linear contract with scalar $α$, then switch to offering a linear contract with scalar $0$. This switch causes the agent to ``free-fall'' through their action space and during this time provides the principal with non-zero reward at zero cost. Despite apparent exploitation of the agent, this dynamic contract can leave \emph{both} players better off compared to the best static contract. Our results generalize beyond success/failure, to arbitrary non-linear contracts which the principal rescales dynamically. Finally, we quantify the dependence of our results on knowledge of the time horizon, and are the first to address this consideration in the study of strategizing against learning agents.

cs.GT