Distributional-Prediction Guarantees for Strategic Contracts and Mechanisms

Establish a P5-style theorem for mechanism-design settings in which a principal uses a predicted distribution, by relating distributional misspecification to downstream utility while preserving the relevant incentive or best-response constraints, including the possibility that the induced action changes under perturbation.

Background

The survey considers using a predicted distribution in contract design or Bayesian persuasion through a robustness lens. Unlike ordinary optimization, perturbing the predicted distribution can affect not only the objective but also feasibility: Bayesian incentive constraints may depend on the distribution, and an agent’s best response to a contract can change when the distribution changes.

The survey reports that the needed end-to-end result was not found in the reviewed literature. Such a theorem would have to control both the effect of distributional perturbation on the principal’s objective and the stability of the induced action or incentive constraints.