{"id":181829,"date":"2009-09-29T00:00:00","date_gmt":"2009-10-31T09:06:39","guid":{"rendered":"https:\/\/www.microsoft.com\/en-us\/research\/msr-research-item\/contracting-with-asymmetric-externalities\/"},"modified":"2016-09-09T09:43:42","modified_gmt":"2016-09-09T16:43:42","slug":"contracting-with-asymmetric-externalities","status":"publish","type":"msr-video","link":"https:\/\/www.microsoft.com\/en-us\/research\/video\/contracting-with-asymmetric-externalities\/","title":{"rendered":"Contracting with Asymmetric Externalities"},"content":{"rendered":"<div class=\"asset-content\">\n<p>We model situations in which a principal provides incentives to a group<br \/>\nof agents to participate in a project (such as a social event, commercial<br \/>\nactivity or the adoption of a certain technological standartization).<br \/>\nAgents&#8217; benefits from participation depend on the identity of other<br \/>\nparticipating agents. We assume bilateral externalities and characterize the<br \/>\noptimal incentive mechanism. Using a graph-theoretic approach we show that<br \/>\nthe optimal mechanism provides a ranking of incentives for the agents, which<br \/>\ncan be described as arising from a virtual popularity tournament among the<br \/>\nagents (similar to ones carried out by sport associations). Rather than simply<br \/>\nranking agents according to their measure of popularity, the optimal mechanism<br \/>\nmakes use of more refined two-way comparison between the agents. An<br \/>\nimplication of our analysis is that higher levels of asymmetry of externalities<br \/>\nbetween the agents enable a reduction of the principal&#8217;s payment. In addition,<br \/>\ncontrary to intuition, an increase in the aggregate externalities, does not<br \/>\nnecessarily decrease principal&#8217;s payment, nor does it change agents rewards.<\/p>\n<p>http:\/\/www.ma.huji.ac.il\/~mseyal\/documents\/multiagent_October_2008B.pdf<\/p>\n<\/div>\n<p><!-- .asset-content --><\/p>\n","protected":false},"excerpt":{"rendered":"<p>We model situations in which a principal provides incentives to a group of agents to participate in a project (such as a social event, commercial activity or the adoption of a certain technological standartization). Agents&#8217; benefits from participation depend on the identity of other participating agents. We assume bilateral externalities and characterize the optimal incentive [&hellip;]<\/p>\n","protected":false},"featured_media":194322,"template":"","meta":{"msr-url-field":"","msr-podcast-episode":"","msrModifiedDate":"","msrModifiedDateEnabled":false,"ep_exclude_from_search":false,"_classifai_error":"","msr_hide_image_in_river":0,"footnotes":""},"research-area":[],"msr-video-type":[],"msr-locale":[268875],"msr-post-option":[],"msr-session-type":[],"msr-impact-theme":[],"msr-pillar":[],"msr-episode":[],"msr-research-theme":[],"class_list":["post-181829","msr-video","type-msr-video","status-publish","has-post-thumbnail","hentry","msr-locale-en_us"],"msr_download_urls":"","msr_external_url":"https:\/\/youtu.be\/3xiEqMwzcAc","msr_secondary_video_url":"","msr_video_file":"","_links":{"self":[{"href":"https:\/\/www.microsoft.com\/en-us\/research\/wp-json\/wp\/v2\/msr-video\/181829","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.microsoft.com\/en-us\/research\/wp-json\/wp\/v2\/msr-video"}],"about":[{"href":"https:\/\/www.microsoft.com\/en-us\/research\/wp-json\/wp\/v2\/types\/msr-video"}],"version-history":[{"count":0,"href":"https:\/\/www.microsoft.com\/en-us\/research\/wp-json\/wp\/v2\/msr-video\/181829\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.microsoft.com\/en-us\/research\/wp-json\/wp\/v2\/media\/194322"}],"wp:attachment":[{"href":"https:\/\/www.microsoft.com\/en-us\/research\/wp-json\/wp\/v2\/media?parent=181829"}],"wp:term":[{"taxonomy":"msr-research-area","embeddable":true,"href":"https:\/\/www.microsoft.com\/en-us\/research\/wp-json\/wp\/v2\/research-area?post=181829"},{"taxonomy":"msr-video-type","embeddable":true,"href":"https:\/\/www.microsoft.com\/en-us\/research\/wp-json\/wp\/v2\/msr-video-type?post=181829"},{"taxonomy":"msr-locale","embeddable":true,"href":"https:\/\/www.microsoft.com\/en-us\/research\/wp-json\/wp\/v2\/msr-locale?post=181829"},{"taxonomy":"msr-post-option","embeddable":true,"href":"https:\/\/www.microsoft.com\/en-us\/research\/wp-json\/wp\/v2\/msr-post-option?post=181829"},{"taxonomy":"msr-session-type","embeddable":true,"href":"https:\/\/www.microsoft.com\/en-us\/research\/wp-json\/wp\/v2\/msr-session-type?post=181829"},{"taxonomy":"msr-impact-theme","embeddable":true,"href":"https:\/\/www.microsoft.com\/en-us\/research\/wp-json\/wp\/v2\/msr-impact-theme?post=181829"},{"taxonomy":"msr-pillar","embeddable":true,"href":"https:\/\/www.microsoft.com\/en-us\/research\/wp-json\/wp\/v2\/msr-pillar?post=181829"},{"taxonomy":"msr-episode","embeddable":true,"href":"https:\/\/www.microsoft.com\/en-us\/research\/wp-json\/wp\/v2\/msr-episode?post=181829"},{"taxonomy":"msr-research-theme","embeddable":true,"href":"https:\/\/www.microsoft.com\/en-us\/research\/wp-json\/wp\/v2\/msr-research-theme?post=181829"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}