Leveled-Commitment Contracting: A Backtracking Instrument for Multiagent Systems

Tuomas Sandholm, Victor Lesser


In (automated) negotiation systems for self-interested agents, contracts have traditionally been binding. They do not accommodate future events. Contingency contracts address this but are often impractical. As an alternative, we propose leveledcommitment contracts. The level of commitment is set by decommitting penalties. To be freed from the contract, an agent simply pays its penalty to the other contract party(ies). A self-interested agent will be ruluctant to decommit because some other contract party might decommit, in which case the former agent gets freed from the contract, does not incur a penalty, and collects a penalty from the other party. We show that despite such strategic decommitting, leveled commitment increases the expected payoffs of all contract parties and can enable deals that are impossible under full commitment. Different decommitting mechanisms are introduced and compared. Practical prescriptions for market designers are presented. A contract optimizer, ECOMMITTER, is provided on the web.

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