Succinct Ambiguous Contracts

Understand

Real-world contracts are often ambiguous.

• While recent work by D\"utting, Feldman, Peretz, and Samuelson (EC 2023, Econometrica 2024) demonstrates that ambiguous contracts can yield large gains for the principal, their optimal solutions often require deploying an impractically large menu of contracts.
• This paper investigates \emph{succinct} ambiguous contracts, which are restricted to consist of at most $k$ classic contracts.
• By letting $k$ range from $1$ to $n-1$, this yields an interpolation between classic contracts ($k=1$) and unrestricted ambiguous contracts ($k=n-1$).