Multi-Agent Non-Discriminatory Contracts

TL;DR

This paper investigates the balance between maximizing a principal's utility and ensuring fair, non-discriminatory payments among multiple agents, providing bounds and characterizations of this tradeoff.

Contribution

It introduces the concept of the price of non-discrimination in multi-agent contracts and characterizes the tradeoff between fairness and utility loss.

Findings

Almost tight logarithmic bound on the price of non-discrimination.

Constant bound achievable with relaxed non-discrimination constraints.

Comprehensive characterization of the utility-fairness tradeoff.

Abstract

We study multi-agent contracts, in which a principal delegates a task to multiple agents and incentivizes them to exert effort. Prior research has mostly focused on maximizing the principal's utility, often resulting in highly disparate payments among agents. Such disparities among agents may be undesirable in practice, for example, in standardized public contracting or worker cooperatives where fairness concerns are essential. Motivated by these considerations, our objective is to quantify the tradeoff between maximizing the principal's utility and equalizing payments among agents, which we call the price of non-discrimination. Our first result is an almost tight bound on the price of non-discrimination, which scales logarithmically with the number of agents. This bound can be improved to a constant by allowing some relaxation of the non-discrimination requirement. We then provide a comprehensive characterization of the tradeoff between the level of non-discrimination and the loss in the optimal utility.