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Perfect implementation

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Author Info

  • Izmalkov, Sergei
  • Lepinski, Matt
  • Micali, Silvio

Abstract

Privacy and trust affect our strategic thinking, yet have not been precisely modeled in mechanism design. In settings of incomplete information, traditional implementations of a normal-form mechanism--by disregarding the players' privacy, or assuming trust in a mediator--may fail to reach the mechanism's objectives. We thus investigate implementations of a new type. We put forward the notion of a perfect implementation of a normal-form mechanism : in essence, a concrete extensive-form mechanism exactly preserving all strategic properties of , without relying on trusted mediators or violating the players' privacy. We prove that any normal-form mechanism can be perfectly implemented by a verifiable mediator using envelopes and an envelope-randomizing device. Differently from a trusted mediator, a verifiable one only performs prescribed public actions, so that everyone can verify that he is acting properly, and that he never learns any information that should remain private.

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Bibliographic Info

Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 71 (2011)
Issue (Month): 1 (January)
Pages: 121-140

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Handle: RePEc:eee:gamebe:v:71:y:2011:i:1:p:121-140

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Web page: http://www.elsevier.com/locate/inca/622836

Related research

Keywords: Mechanism design Trust Privacy;

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References

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  1. Gerardi, Dino & Myerson, Roger B., 2007. "Sequential equilibria in Bayesian games with communication," Games and Economic Behavior, Elsevier, vol. 60(1), pages 104-134, July.
  2. Forges, F., 1984. "An approach to communication equilibria," CORE Discussion Papers 1984035, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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  4. Maskin, Eric & Sjostrom, Tomas, 2002. "Implementation theory," Handbook of Social Choice and Welfare, in: K. J. Arrow & A. K. Sen & K. Suzumura (ed.), Handbook of Social Choice and Welfare, edition 1, volume 1, chapter 5, pages 237-288 Elsevier.
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  7. Ben-Porath, Elchanan, 1998. "Correlation without Mediation: Expanding the Set of Equilibrium Outcomes by "Cheap" Pre-play Procedures," Journal of Economic Theory, Elsevier, vol. 80(1), pages 108-122, May.
  8. Vijay Krishna, R., 2007. "Communication in games of incomplete information: Two players," Journal of Economic Theory, Elsevier, vol. 132(1), pages 584-592, January.
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  11. FORGES, Françoise, . "Universal mechanisms," CORE Discussion Papers RP -914, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  12. Rothkopf, Michael H & Teisberg, Thomas J & Kahn, Edward P, 1990. "Why Are Vickrey Auctions Rare?," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 94-109, February.
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Cited by:
  1. Forges, Françoise & Vida, Péter, 2013. "Implementation of Communication Equilibria by Correlated Cheap Talk : the Two-Player Case," Economics Papers from University Paris Dauphine 123456789/8159, Paris Dauphine University.

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