A minimum sensitivity approach to incentive design problems

@article{Cansever1982AMS,
  title={A minimum sensitivity approach to incentive design problems},
  author={Derya Cansever and Tamer Basar},
  journal={1982 21st IEEE Conference on Decision and Control},
  year={1982},
  pages={158-163}
}
In this paper we introduce the notion of "robust" incentive schemes in multi-agent decision problems with a hierarchical decision structure, and discuss derivation of such policies by minimizing, in addition to the usual (standard) Stackelberg performance indices, an appropriate sensitivity function. Such an approach has applications in decision problems wherein the leader does not know the exact values of some parameters characterizing the follower's cost functional, and seeks to robustify his… CONTINUE READING
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