An Experiment on Nash Implementation

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An Experiment on Nash Implementation

Author Info

Gary Charness (University of California, Santa Barbara)
Antonio Cabrales (Universidad Carlos III de Madrid)
Luis Corchon

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Abstract

We perform an experimental test of a modification of the controversial canonical mechanism for Nash implementation, using 3 subjects in non-repeated groups, as well as 3 outcomes, states of nature, and integer choices. We find that this mechanism successfully implements the desired outcome a large majority of the time, providing empirical evidence for the feasibility of such implementation. In addition, the performance is further improved by imposing a fine on a dissident, so that the mechanism implements strict Nash equilibria. While our environment is stylized, our results offer hope that experiments can identify reasonable features for practical implementation mechanisms.

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Paper provided by Department of Economics, UC Santa Barbara in its series University of California at Santa Barbara, Economics Working Paper Series with number 19-01.

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Date of creation: 13 Jun 2001
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Handle: RePEc:cdl:ucsbec:19-01

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Article
- Cabrales, Antonio & Charness, Gary & Corchon, Luis C., 2003. "An experiment on Nash implementation," Journal of Economic Behavior & Organization, Elsevier, vol. 51(2), pages 161-193, June. [Downloadable!] (restricted)
Paper
- Antonio Cabrales & Gary Charness & Luis Corchón, 1998. "An Experiment on Nash Implementation," Economics Working Papers 300, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Groves, Theodore & Ledyard, John O, 1977. "Optimal Allocation of Public Goods: A Solution to the "Free Rider" Problem," Econometrica, Econometric Society, vol. 45(4), pages 783-809, May. [Downloadable!] (restricted)
Other versions:
- Theodore Groves & John Ledyard, 1976. "Optimal Allocation of Public Goods: A Solution to the 'Free Rider Problem'," Discussion Papers 144, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
Katok, Elena & Sefton, Martin & Yavas, Abdullah, 2002. "Implementation by Iterative Dominance and Backward Induction: An Experimental Comparison," Journal of Economic Theory, Elsevier, vol. 104(1), pages 89-103, May. [Downloadable!] (restricted)
Yan Chen & Fang-Fang Tang, 1998. "Learning and Incentive-Compatible Mechanisms for Public Goods Provision: An Experimental Study," Journal of Political Economy, University of Chicago Press, vol. 106(3), pages 633-662, June. [Downloadable!] (restricted)
Cabrales, Antonio, 1999. "Adaptive Dynamics and the Implementation Problem with Complete Information," Journal of Economic Theory, Elsevier, vol. 86(2), pages 159-184, June. [Downloadable!] (restricted)
Other versions:
- Antonio Cabrales, 1996. "Adaptive Dynamics and the Implementation Problem with Complete Information," Economics Working Papers 179, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
- Antonio Cabrales, . "Adaptive Dynamics and the Implementation Problem with Complete Information," ELSE working papers 009, ESRC Centre on Economics Learning and Social Evolution. [Downloadable!]
Isaac, R Mark & Walker, James M, 1988. "Group Size Effects in Public Goods Provision: The Voluntary Contributions Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 103(1), pages 179-99, February. [Downloadable!] (restricted)
Jackson, Matthew O, 1992. "Implementation in Undominated.Strategies: A Look at Bounded Mechanisms," Review of Economic Studies, Blackwell Publishing, vol. 59(4), pages 757-75, October. [Downloadable!] (restricted)
Other versions:
- Matthew 0. Jackson, 1989. "Implementation in Undominated Strategies - A Look at Bounded Mechanisms," Discussion Papers 833, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
John H. Kagel & A. Alexander Elbittar, 2004. "King Solomon's Dilemma: A Laboratory Study on Implementation," Econometric Society 2004 North American Winter Meetings 592, Econometric Society.
Sefton, Martin & Yavas, Abdullah, 1996. "Abreu-Matsushima Mechanisms: Experimental Evidence," Games and Economic Behavior, Elsevier, vol. 16(2), pages 280-302, October. [Downloadable!] (restricted)
Abreu, Dilip & Matsushima, Hitoshi, 1992. "Virtual Implementation in Iteratively Undominated Strategies: Complete Information," Econometrica, Econometric Society, vol. 60(5), pages 993-1008, September. [Downloadable!] (restricted)
Other versions:
- Abreu, D. & Matsushima, H., 1991. "Virtual Implementation in Iteratively Undominated Strategies: Incomplete Information," Papers e-91-2, Stanford - Hoover Institution.
- Abreu, D. & Matsushima, H., 1991. "Virtual Implementation in Iteratively Undominated Strategies: Incomplete Information," Papers e-91-1, Stanford - Hoover Institution.
Selten, Reinhard & Abdolkarim Sadrieh & Klaus Abbink, 1995. "Money does Not Induce Risk Neutral Behavior, but Binary Lotteries Do even Worse," Discussion Paper Serie B 343, University of Bonn, Germany.
Perry, Motty & Reny, Philip J., 1999. "A General Solution to King Solomon's Dilemma," Games and Economic Behavior, Elsevier, vol. 26(2), pages 279-285, January. [Downloadable!] (restricted)
Other versions:
- Perry, M. & Reny, P.J., 1995. "A General Solution to King Solomon's Dilemma," Papers 9581, Tilburg - Center for Economic Research.
Glazer, Jacob & Rosenthal, Robert W, 1992. "A Note on Abreu-Matsushima Mechanisms," Econometrica, Econometric Society, vol. 60(6), pages 1435-38, November. [Downloadable!] (restricted)
Barsky, Robert B, et al, 1997. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Study," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 537-79, May.

Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Antonio Cabrales & Giovanni Ponti, 2000. "Implementation, Elimination of Weakly Dominated Strategies and Evolutionary Dynamics," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(2), pages 247-282, April. [Downloadable!] (restricted)
Other versions:
- Antonio Cabrales & Giovanni Ponti, . "Implementation, Elimination of Weakly Dominated Strategies and Evolotionary Dynamics," ELSE working papers 057, ESRC Centre on Economics Learning and Social Evolution. [Downloadable!]
- Antonio Cabrales & Giovanni Ponti, 1997. "Implementation, Elimination of Weakly Dominated Strategies and Evolutionary Dynamics," Economics Working Papers 221, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
- Antonio Cabrales & Giovanni Ponti, . "Implementation, Elimination of Weakly Dominated Strategies and Evolutionary Dynamics," University of California at Santa Barbara, Economics Working Paper Series 6-98, Department of Economics, UC Santa Barbara.
- Antonio Cabrales & Giovanni Ponti, 2000. "Implementation, Elimination Of Weakly Dominated Strategies And Evolutionary Dynamics," Working Papers. Serie AD 2000-18, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
- Antonio Cabrales & Giovanni Ponti, . "Implementation, Elimination of Weakly Dominated Strategies and Evolutionary Dynamics," University of California at Santa Barbara, Economics Working Paper Series 6-98, Department of Economics, UC Santa Barbara.
Dunia López-Pintado & Giovanni Ponti, 2003. "Solomon'S Dilemma: An Experimental Study On Dynamic Implementation," Working Papers. Serie AD 2003-11, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
Other versions:
- Giovanni Ponti & Anita Gantner & Dunia López-Pintado & Robert Montgomery, 2003. "Solomon's Dilemma: An experimental study on dynamic implementation," Review of Economic Design, Springer, vol. 8(2), pages 217-239, October. [Downloadable!] (restricted)

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