Generalized Principal-Agent Problem with a Learning Agent

TL;DR

This paper analyzes repeated principal-agent problems where the agent learns over time, providing bounds on the principal's utility based on the agent's learning algorithms and extending classic models to learning scenarios.

Contribution

It introduces a reduction of repeated learning-agent problems to one-shot approximate best responses and derives utility guarantees based on different learning algorithms used by the agent.

Findings

Principal's utility approaches optimal with no-regret learning agents.

Principal's utility is limited when agents use swap-regret algorithms.

Mean-based learning agents can sometimes outperform the classic optimal utility.

Abstract

In classic principal-agent problems such as Stackelberg games, contract design, and Bayesian persuasion, the agent best responds to the principal's committed strategy. We study repeated generalized principal-agent problems under the assumption that the principal does not have commitment power and the agent uses algorithms to learn to respond to the principal. We reduce this problem to a one-shot problem where the agent approximately best responds, and prove that: (1) If the agent uses contextual no-regret learning algorithms with regret $\mathrm{Reg}(T)$, then the principal can guarantee utility at least $U^* - \Theta\big(\sqrt{\tfrac{\mathrm{Reg}(T)}{T}}\big)$, where $U^*$ is the principal's optimal utility in the classic model with a best-responding agent. (2) If the agent uses contextual no-swap-regret learning algorithms with swap-regret $\mathrm{SReg}(T)$, then the principal cannot obtain utility more than $U^* + O(\frac{\mathrm{SReg(T)}}{T})$. (3) In addition, if the agent uses mean-based learning algorithms (which can be no-regret but not no-swap-regret), then the principal can sometimes do significantly better than $U^*$. These results not only refine previous works on Stackelberg games and contract design, but also lead to new results for Bayesian persuasion with a learning agent and all generalized principal-agent problems where the agent does not have private information.