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The Theory of Implementation of Social Choice Rules

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Suppose that the goals of a society can be summarized in a social choice rule, i.e., a mapping from relevant underlying parameters to final outcomes. Typically, the underlying parameters (e.g., individual preferences) are private information to the agents in society. The implementation problem is then formulated: under what circumstances can one design a mechanism so that the private information is truthfully elicited and the social optimum ends up being implemented? In designing such a mechanism, appropriate incentives will have to be given to the agents so that they do not wish to misrepresent their information. The theory of implementation or mechanism design formalizes this “social engineering” problem and provides answers to the question just posed. I survey the theory of implementation in this article, emphasizing the results based on two behavioral assumptions for the agents (dominant strategies and Nash equilibrium). Examples discussed include voting, and the allocation of private and public goods under complete and incomplete information.

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Paper provided by Brown University, Department of Economics in its series Working Papers with number 2003-19.

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Date of creation: 2003
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Handle: RePEc:bro:econwp:2003-19

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Postal: Department of Economics, Brown University, Providence, RI 02912

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Cited by:
  1. Norovsambuu Tumennasan, 2011. "To Err is Human: Implementation in Quantal Response Equilibria," Economics Working Papers, School of Economics and Management, University of Aarhus 2011-11, School of Economics and Management, University of Aarhus.
  2. Wu, Haoyang, 2011. "A novel result on the revenue equivalence theorem," MPRA Paper 31988, University Library of Munich, Germany.
  3. Maskin, Eric S., 2007. "Mechanism Design: How to Implement Social Goals," Nobel Prize in Economics documents, Nobel Prize Committee 2007-4, Nobel Prize Committee.
  4. Roberto Serrano, 2004. "Fifty Years of the Nash Program, 1953-2003," Working Papers, Brown University, Department of Economics 2004-20, Brown University, Department of Economics.
  5. Axel Ockenfels, 2008. "Marktdesign und Experimentelle Wirtschaftsforschung," Working Paper Series in Economics, University of Cologne, Department of Economics 41, University of Cologne, Department of Economics.
  6. Anirban Kar & Indrajit Ray & Roberto Serrano, 2005. "Multiple Equilibria as a Difficulty in Understanding Correlated Distributions," Working Papers, Brown University, Department of Economics 2005-10, Brown University, Department of Economics.
  7. Antonio Cabrales & Roberto Serrano, 2007. "Implementation in adaptive better-response dynamics," Working Papers, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales 2007-16, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
  8. Luis C. Corchon, 2007. "The theory of implementation : what did we learn?," Economics Working Papers we081207, Universidad Carlos III, Departamento de Economía.
  9. Eric Maskin, 2004. "The Unity of Auction Theory: Paul Milgrom's Masterclass," Economics Working Papers, Institute for Advanced Study, School of Social Science 0044, Institute for Advanced Study, School of Social Science.
  10. Georgy Artemov & Takashi Kunimoto & Roberto Serrano, 2007. "Robust Virtual Implementation with Incomplete Information: Toward a Reinterpretation of the Wilson Doctrine," Working Papers, Brown University, Department of Economics 2007-6, Brown University, Department of Economics.
  11. Wu, Haoyang, 2011. "On amending the sufficient conditions for Nash implementation," MPRA Paper 30067, University Library of Munich, Germany.
  12. Wu, Haoyang, 2011. "Quantum Bayesian implementation and revelation principle," MPRA Paper 30653, University Library of Munich, Germany.
  13. Wu, Haoyang, 2011. "Quantum and algorithmic Bayesian mechanisms," MPRA Paper 30072, University Library of Munich, Germany.

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