Seminar (Dept. of Management Science and Engineering)

Theme：Dynamic Contract for Efficient Resource Allocation

Speaker：Yong Liang (Tsinghua University)

Time：2020-11-11 12:10

Address：Room 1008, Mingde Business Building

Language：English

Abstract：

Motivated by allocation of online visits to product/service/content suppliers in the platform economy, we consider a dynamic contract design problem in which a principal constantly determines the allocation of a resource to multiple agents. Although agents are capable of running the business, they introduce adverse events, the frequency of which depends on each agent's effort level.  With an objective of maximizing social welfare, we study dynamic contracts that utilize resource allocation and monetary transfers to induce agents to exert effort and reduce the arrival rate of adverse events.  In contrast to the single-agent case, in which efficiency is not achievable, we show that efficient and incentive-compatible contracts, which allocate all resources and induce agents to exert effort all the time, generally exist with two or more agents.  We devise an iterative algorithm that characterizes and calculates such contracts.  Furthermore, we provide a simple efficient and incentive-compatible dynamic contract that can be expressed in closed-form, and, therefore, is easy to understand and implement in practice.

Short biography:

Yong Liang is an associate professor of the Department of Management Science and Engineering in the School of Economics and Management at Tsinghua University. Prior to joining the faculty of Tsinghua University, he worked for Google's techinical infrastructure team as an operations researcher to optimize Google's fleet, from designing rack configurations to planning service migrations.

He received a B.S. from Tsinghua University, an M.S. from Purdue University. He received his Ph.D. in Industrial Engineering and Operations Research from University of California, Berkeley. His research interests include (i) dynamic programming, stochastic and robust optimization and their applications in Operations Management, (ii) the energy and IT systems optimization, and (iii) supply chain management and analytics. He has published high-quality research articles in top-tier OR/MS journals like Operations Research, Manufacturing and Service Operations Management, Production and Operations Management, INFORMS Journal on Computing, IISE Transactions among others.