Advanced Search
MyIDEAS: Login

Foundations of Dominant Strategy Mechanisms

Contents:

Author Info

  • Jeff Ely

Abstract

Wilson (1987) criticizes the existing literature of game theory as relying too much on common-knowledge assumptions. In reaction to Wilson's critique, the recent literature of mechanism design has started to employ stronger solution concepts such as dominant strategy incentive compatibility, and restrict attention to simpler mechanisms such as dominant strategy mechanisms. However, there has been little theory behind this approach. In particular, it has not been made clear why employing simpler mechanisms, instead of more complicated ones, is the correct way to address Wilson's critique. This paper aims at filling this void. We propose a potential theory, known as the {\it maxmin} theory, which postulates that a {\it cautious} mechanism designer, facing uncertainty over which (common-knowledge) assumptions are valid and which are not, would indeed rationally choose simpler mechanisms such as dominant strategy mechanisms. In this paper, we summarize our progress in proving this theory, explore other possible theories, and discuss related theoretical questions that will be of interest in other areas

(This abstract was borrowed from another version of this item.)

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.kellogg.northwestern.edu/research/math/dps/1372.pdf
Our checks indicate that this address may not be valid because: 404 Not Found. If this is indeed the case, please notify (David K. Levine)
Download Restriction: no

Bibliographic Info

Paper provided by UCLA Department of Economics in its series Theory workshop papers with number 658612000000000064.

as in new window
Length:
Date of creation: 31 Oct 2003
Date of revision:
Handle: RePEc:cla:uclatw:658612000000000064

Contact details of provider:
Web page: http://www.dklevine.com/

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
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.:
as in new window
  1. Neeman, Z., 1998. "The Relevance of Private Infromation in Mechanism Design," Papers 93, Boston University - Department of Economics.
  2. Morris, Stephen, 1995. "The Common Prior Assumption in Economic Theory," Economics and Philosophy, Cambridge University Press, vol. 11(02), pages 227-253, October.
  3. Dirk Bergemann & Stephen Morris, 2003. "Robust Mechanism Design," Levine's Bibliography 666156000000000035, UCLA Department of Economics.
  4. Roger B. Myerson, 1978. "Optimal Auction Design," Discussion Papers 362, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  5. Cremer, Jacques & McLean, Richard P, 1985. "Optimal Selling Strategies under Uncertainty for a Discriminating Monopolist When Demands Are Interdependent," Econometrica, Econometric Society, vol. 53(2), pages 345-61, March.
  6. Ilya Segal, 2003. "Optimal Pricing Mechanisms with Unknown Demand," American Economic Review, American Economic Association, vol. 93(3), pages 509-529, June.
  7. Barton L. Lipman, 1997. "Finite Order Implications of Common Priors," Game Theory and Information 9703005, EconWPA.
  8. repec:wop:humbsf:2000-72 is not listed on IDEAS
  9. Motty Perry & Philip J. Reny, 2002. "An Efficient Auction," Econometrica, Econometric Society, vol. 70(3), pages 1199-1212, May.
  10. Partha Dasgupta & Eric Maskin, 2000. "Efficient Auctions," The Quarterly Journal of Economics, MIT Press, vol. 115(2), pages 341-388, May.
  11. Faruk Gul, 1998. "A Comment on Aumann's Bayesian View," Econometrica, Econometric Society, vol. 66(4), pages 923-928, July.
  12. Neeman, Zvika, 2003. "The effectiveness of English auctions," Games and Economic Behavior, Elsevier, vol. 43(2), pages 214-238, May.
  13. Cremer, Jacques & McLean, Richard P, 1988. "Full Extraction of the Surplus in Bayesian and Dominant Strategy Auctions," Econometrica, Econometric Society, vol. 56(6), pages 1247-57, November.
  14. Brandenburger Adam & Dekel Eddie, 1993. "Hierarchies of Beliefs and Common Knowledge," Journal of Economic Theory, Elsevier, vol. 59(1), pages 189-198, February.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:cla:uclatw:658612000000000064

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (David K. Levine).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.