Linear Contract

Linear contracts, agreements where payments are linearly related to performance outcomes, are a focus of ongoing research in contract theory, particularly within the context of repeated interactions and online learning. Current research explores optimal contract design using algorithms like bandit algorithms and neural networks (e.g., Extended Linearized Contracting Dynamics), aiming to maximize principal utility while accounting for agent behavior and information asymmetry. This work has implications for various fields, including decentralized machine learning and smart contract design, by providing frameworks for efficient and robust contract creation in dynamic and uncertain environments.