The Pseudo-Dimension of Contracts
This work addresses algorithmic contract design for a principal incentivizing an agent, with applications in economics and mechanism design, though it appears incremental by building on prior learning frameworks.
The paper tackles the problem of learning near-optimal contracts from sample agent types when the agent's type distribution is unknown, using pseudo-dimension from statistical learning theory. It provides essentially optimal tradeoffs between pseudo-dimension and representation error for linear and bounded contracts, with sample- and time-efficient learning algorithms and matching lower bounds, while proving impossibility for unbounded contracts.
Algorithmic contract design studies scenarios where a principal incentivizes an agent to exert effort on her behalf. In this work, we focus on settings where the agent's type is drawn from an unknown distribution, and formalize an offline learning framework for learning near-optimal contracts from sample agent types. A central tool in our analysis is the notion of pseudo-dimension from statistical learning theory. Beyond its role in establishing upper bounds on the sample complexity, pseudo-dimension measures the intrinsic complexity of a class of contracts, offering a new perspective on the tradeoffs between simplicity and optimality in contract design. Our main results provide essentially optimal tradeoffs between pseudo-dimension and representation error (defined as the loss in principal's utility) with respect to linear and bounded contracts. Using these tradeoffs, we derive sample- and time-efficient learning algorithms, and demonstrate their near-optimality by providing almost matching lower bounds on the sample complexity. Conversely, for unbounded contracts, we prove an impossibility result showing that no learning algorithm exists. Finally, we extend our techniques in three important ways. First, we provide refined pseudo-dimension and sample complexity guarantees for the combinatorial actions model, revealing a novel connection between the number of critical values and sample complexity. Second, we extend our results to menus of contracts, showing that their pseudo-dimension scales linearly with the menu size. Third, we adapt our algorithms to the online learning setting, where we show that, a polynomial number of type samples suffice to learn near-optimal bounded contracts. Combined with prior work, this establishes a formal separation between expert advice and bandit feedback for this setting.