Asking the Right Question: Risk and Expectation in Multi-Agent Contracting

Abstract

This paper investigates methods of reducing risk in market-based auctions of tasks with complex time constraints and interdependencies. The research addresses problems in a contracting setting in which a buyer has a set of tasks to be performed. Because of the complex dependencies among the tasks, a task not completed on time might have devastating effect on other tasks. Therefore, the problem is to sequence tasks and allocate time windows to maximize the expected utility of the agent. Because there is a probability of loss as well as a probability of gain, the decision process must deal with the risk posture of the person or organization on whose behalf the decision maker is acting.