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Secure Implementation Experiments: Do Strategy-proof Mechanisms Really Work?

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Author Info
Cason, Timothy N. (Purdue U)
Saijo, Tatsuyoshi (Osaka U)
Sjostrom, Tomas (Pennsylvania State U)
Yamato, Takehiko (Tokyo Institute of Technology)

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Abstract

Strategy-proofness, requiring that truth-telling is a dominant strategy, is a standard concept used in social choice theory. Saijo et al. (2003) argue that this concept has serious drawbacks. In particular, announcing one's true preference may not be a unique dominant strategy, and almost all strategy-proof mechanisms have a continuum of Nash equilibria. For only a subset of strategy-proof mechanisms do the set of Nash equilibria and the set of dominant strategy equilibria coincide. For example, this double coincidence occurs in the Groves mechanism when preferences are single-peaked. We report experiments using two strategy-proof mechanisms where one of them has a large number of Nash equilibria, but the other has a unique Nash equilibrium. We found clear differences in the rate of dominant strategy play between the two.

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Paper provided by Pennsylvania State University, Department of Economics in its series Working Papers with number 4-03-1.

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Date of creation: Apr 2003
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Handle: RePEc:ecl:peneco:4-03-1

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C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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  2. Yan Chen & Robert Gazzale, 2004. "When Does Learning in Games Generate Convergence to Nash Equilibria? The Role of Supermodularity in an Experimental Setting," American Economic Review, American Economic Association, vol. 94(5), pages 1505-1535, December. [Downloadable!]
  3. repec:att:wimass:199325 is not listed on IDEAS
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  6. Saijo, Tatsuyoshi & Sjöström, Tomas & Yamato, Takehiko, 2003. "Secure Implementation: Strategy-Proof Mechanisms Reconsidered," Working Papers 1174, California Institute of Technology, Division of the Humanities and Social Sciences. [Downloadable!]
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  7. Kawagoe, Toshiji & Mori, Toru, 2001. " Can the Pivotal Mechanism Induce Truth-Telling? An Experimental Study," Public Choice, Springer, vol. 108(3-4), pages 331-54, September. [Downloadable!] (restricted)
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  1. Das, Chhandita & Anderson, Christopher & Swallow, Stephen, 2006. "Incentive Compatible Mechanism Design for Discrete Choice Surveys," 2006 Annual meeting, July 23-26, Long Beach, CA 21327, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  2. Tatsuyoshi Saijo & Tomas Sjostrom & Takehiko Yamato, 2005. "Secure Implementation," Economics Working Papers 0056, Institute for Advanced Study, School of Social Science. [Downloadable!]
    Other versions:
  3. Healy, Paul J., 2003. "Learning Dynamics in Mechanism Design: An Experimental Comparison of Public Goods Mechanisms," Working Papers 1182, California Institute of Technology, Division of the Humanities and Social Sciences. [Downloadable!]
  4. Yuji Fujinaka & Takuma Wakayama, 2007. "Secure Implementation in Economies with Indivisible Objects and Money," ISER Discussion Paper 0699, Institute of Social and Economic Research, Osaka University. [Downloadable!]
  5. Tatsuyoshi Saijo & Tomas Sjostrom & Takehiko Yamato, 2003. "Secure Implementation:Strategy-Proof Mechanisms Reconsidered," Discussion papers 03019, Research Institute of Economy, Trade and Industry (RIETI). [Downloadable!]
    Other versions:
  6. Hideki Mizukami & Tatsuyoshi Saijo & Takuma Wakayama, 2003. "Strategy-proof Sharing," Discussion papers 03017, Research Institute of Economy, Trade and Industry (RIETI). [Downloadable!]
    Other versions:
  7. Daniel McFadden, 2009. "The human side of mechanism design: a tribute to Leo Hurwicz and Jean-Jacque Laffont," Review of Economic Design, Springer, vol. 13(1), pages 77-100, April. [Downloadable!] (restricted)
  8. Mathevet, Laurent, 2007. "Supermodular Bayesian implementation: Learning and incentive design," Working Papers 1265, California Institute of Technology, Division of the Humanities and Social Sciences. [Downloadable!]
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