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Dominant Strategies Implementation when Compensations are Allowed:a Characterization Fundación

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Abstract

Dominant strategies truthful implementation of flexible social objectives involves the ability of the planner to alter the individual incentives in such a way that the externality imposed on society by each agent reporting a given type is fully internalized in the agent’s final payoff. In other words, the agents’ objective function must mimic the social objectives. We find that our main result is robust enough to explain why well-known mechanisms like Groves’s transfers work in some contexts while some other social objectives are not implementable in dominant strategies.

Suggested Citation

  • Juan Perote Peña, 2003. "Dominant Strategies Implementation when Compensations are Allowed:a Characterization Fundación," Economic Working Papers at Centro de Estudios Andaluces E2003/12, Centro de Estudios Andaluces.
    • Handle: RePEc:cea:doctra:e2003_12
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    References listed on IDEAS

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    More about this item

    Keywords

    Individual decisiveness; compensation mechanisms; dominant strategies.;
    All these keywords.

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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