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Natural Implementation with Partially Honest Agents

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  • Lombardi, Michele
  • Yoshihara, Naoki

Abstract

The paper proposes necessary and suffi cient conditions for the natural implementation of (efficient) social choice correspondences (SCCs) in pure finite exchange economies when some of the agents are partially honest. A partially honest agent is an agent who strictly prefers to tell the truth when lying has no better material consequences for her. Firstly, it is shown that if there is even one partially honest agent in the economy (and the planner does not know her identity), then any SCC is Nash implementable by a natural price-allocation mechanism. Secondly, and in sharp contrast with the results of conventional models of natural implementation, it is shown that the equivalence relationship between natural price-allocation mechanisms and natural price-quantity2 mechanisms no longer holds. Finally, and even more strikingly, the paper reports that the class of implementable SCCs by natural price-quantity mechanisms is significantly enlarged.

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Bibliographic Info

Paper provided by Institute of Economic Research, Hitotsubashi University in its series Discussion Paper Series with number 561.

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Length: 38 p.
Date of creation: Feb 2012
Date of revision:
Handle: RePEc:hit:hituec:561

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Keywords: Natural implementation; Nash equilibrium; exchange economies; intrinsic preferences for honesty;

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References

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  1. Michele Lombardi & Naoki Yoshihara, 2013. "A full characterization of nash implementation with strategy space reduction," Economic Theory, Springer, vol. 54(1), pages 131-151, September.
  2. Roberto Serrano & Antonio Cabrales, 2007. "Implemetation In Adaptive Better-Response Dynamics," Working Papers wp2007_0708, CEMFI.
  3. Dutta, Bhaskar & Sen, Arunava, 2012. "Nash implementation with partially honest individuals," Games and Economic Behavior, Elsevier, vol. 74(1), pages 154-169.
  4. Luis Corchón & Carmen Herrero, 2004. "A decent proposal," Spanish Economic Review, Springer, vol. 6(2), pages 107-125, 07.
  5. Kfir Eliaz, 2002. "Fault Tolerant Implementation," Review of Economic Studies, Oxford University Press, vol. 69(3), pages 589-610.
  6. Lombardi, Michele & Yoshihara, Naoki, 2012. "Natural Implementation with Partially Honest Agents," Discussion Paper Series 561, Institute of Economic Research, Hitotsubashi University.
  7. Lombardi, Michele & Yoshihara, Naoki, 2011. "Partially-honest Nash implementation: Characterization results," MPRA Paper 28838, University Library of Munich, Germany.
  8. Bhaskar Dutta & Arunava Sen & Rajiv Vohra, 1994. "Nash implementation through elementary mechanisms in economic environments," Review of Economic Design, Springer, vol. 1(1), pages 173-203, December.
  9. Saijo, Tatsuyoshi, 1988. "Strategy Space Reduction in Maskin's Theorem: Sufficient Conditions for Nash Implementation," Econometrica, Econometric Society, vol. 56(3), pages 693-700, May.
  10. Kartik, Navin & Tercieux, Olivier, 2012. "Implementation with evidence," Theoretical Economics, Econometric Society, vol. 7(2), May.
  11. Samuel Bowles & Herbert Gintis, 2000. "Walrasian Economics In Retrospect," The Quarterly Journal of Economics, MIT Press, vol. 115(4), pages 1411-1439, November.
  12. Eliaz, Kfir, 2002. "Fault Tolerant Implementation," Review of Economic Studies, Wiley Blackwell, vol. 69(3), pages 589-610, July.
  13. Tatsuyoshi Saijo & Yoshikatsu Tatamitani & Takehiko Yamato, 1996. "Natural Implementation With A Simple Punishment," The Japanese Economic Review, Japanese Economic Association, vol. 47(2), pages 170-185, 06.
  14. Kreps, David M, 1997. "Intrinsic Motivation and Extrinsic Incentives," American Economic Review, American Economic Association, vol. 87(2), pages 359-64, May.
  15. Cabrales, Antonio & Serrano, Roberto, 2011. "Implementation in adaptive better-response dynamics: Towards a general theory of bounded rationality in mechanisms," Games and Economic Behavior, Elsevier, vol. 73(2), pages 360-374.
  16. Maskin, Eric, 1999. "Nash Equilibrium and Welfare Optimality," Review of Economic Studies, Wiley Blackwell, vol. 66(1), pages 23-38, January.
  17. Sen, A., 1996. "Maximisation and the Act of Choice," Papers 270, Banca Italia - Servizio di Studi.
  18. Saijo, Tatsuyoshi & Tatamitani, Yoshikatsu & Yamato, Takehiko, 1996. "Toward Natural Implementation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(4), pages 949-80, November.
  19. Suzumura, Kotaro & Xu, Yongsheng, 2000. "Characterizations of Consequentialism and Non-consequentialism," Discussion Paper 3, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
  20. Jon Elster, 1998. "Emotions and Economic Theory," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 47-74, March.
  21. Saijo, Tatsuyoshi & Tatamitani, Yoshikatsu & Yamato, Takehiko, 1999. "Characterizing Natural Implementability: The Fair and Walrasian Correspondences," Games and Economic Behavior, Elsevier, vol. 28(2), pages 271-293, August.
  22. Matthew O. Jackson, 2001. "A crash course in implementation theory," Social Choice and Welfare, Springer, vol. 18(4), pages 655-708.
  23. Tatamitani, Yoshikatsu, 2001. "Implementation by self-relevant mechanisms," Journal of Mathematical Economics, Elsevier, vol. 35(3), pages 427-444, June.
  24. Glazer, Jacob & Rubinstein, Ariel, 1998. "Motives and Implementation: On the Design of Mechanisms to Elicit Opinions," Journal of Economic Theory, Elsevier, vol. 79(2), pages 157-173, April.
  25. Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall.
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Citations

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Cited by:
  1. Lombardi, Michele & Yoshihara, Naoki, 2012. "Natural Implementation with Partially Honest Agents," Discussion Paper Series 561, Institute of Economic Research, Hitotsubashi University.
  2. Lombardi, Michele & Yoshihara, Naoki, 2011. "Partially-honest Nash implementation: Characterization results," Discussion Paper Series 555, Institute of Economic Research, Hitotsubashi University.
  3. Lombardi, Michele & Yoshihara, Naoki, 2013. "Partially Honest Nash Implementation: A Full Characterization," Discussion Paper Series 590, Institute of Economic Research, Hitotsubashi University.
  4. Lombardi, Michele & Yoshihara, Naoki, 2013. "Natural Implementation with Partially Honest Agents in Economic Environments," Discussion Paper Series 592, Institute of Economic Research, Hitotsubashi University.
  5. Hitoshi Matsushima, 2013. "Process manipulation in unique implementation," Social Choice and Welfare, Springer, vol. 41(4), pages 883-893, October.
  6. Lombardi Michele & Yoshihara Naoki, 2010. "A Full Characterization of Nash Implementation with Strategy Space Reduction," Research Memorandum 023, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  7. Ahmed Doghmi, 2013. "Nash Implementation in an Allocation Problem with Single-Dipped Preferences," Games, MDPI, Open Access Journal, vol. 4(1), pages 38-49, January.

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