Order of Movement in Decommitting from a Contract

There is increasing interest in automated agent negotiation and contracting in both commercial and military applications. Sandholm and Lesser proposed leveled commitment contracts allowing agents to decommit from contracts by paying a penalty. Further to this study we analyse the order of movement (decision) in contract decommitment. Intuitively one would expect that moving second is better. We show that this is not always the case. Agents may prefer to move first and not decommit in order to force the other agent to decommit and pay the penalty. Electing to move second may reveal information about an agent´s type, altering its expected payoff and cause instability with the Nash equilibrium presented. This may result in agents that prefer to move second or are indifferent to order to move first or second (or use a mixed strategy) respectively. If at least one agent must pay a large penalty (i.e. full commitment contract), both agents are indifferent to when they move.