# Ambiguous Contracts

arXiv: https://arxiv.org/abs/2302.07621 · HTML: https://mlsanity.com/paper/2302.07621/

## Key facts

- Cited by 2 papers in the map (data through 14 Oct 2026).
- First posted on arXiv 15 Feb 2023.

## Built on by (most cited first, 2 of 2)

- [Contracting with a Learning Agent](https://mlsanity.com/paper/2401.16198/) (2024)
- [Scalable Principal-Agent Contract Design via Gradient-Based Optimization](https://mlsanity.com/paper/2510.21177/) (2025)

## Abstract (arXiv)

We explore the deliberate infusion of ambiguity into the design of contracts. We show that when the agent is ambiguity-averse and hence chooses an action that maximizes their minimum utility, the principal can strictly gain from using an ambiguous contract, and this gain can be arbitrarily high. We characterize the structure of optimal ambiguous contracts, showing that ambiguity drives optimal contracts towards simplicity. We also provide a characterization of ambiguity-proof classes of contracts, where the principal cannot gain by infusing ambiguity. Finally, we show that when the agent can engage in mixed actions, the advantages of ambiguous contracts disappear.