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Local incentive compatibility in ordinal type-spaces

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  • Kumar, Ujjwal
  • Roy, Souvik

Abstract

We explore the relation between different notions of local incentive compatibility (LIC) and incentive compatibility (IC) on ordinal type-spaces. In this context, we introduce the notion of ordinal local global equivalent (OLGE) and cardinal local global equivalent (CLGE) environments. First, we establish the equivalence between the two environments on strict ordinal type-spaces. Next, we consider ordinal type-spaces admitting indifference. We introduce the notion of almost everywhere IC and strong LIC, and provide a necessary and sufficient condition on ordinal type spaces for their equivalence. Finally, we provide results on how to (minimally) check the IC property of a given mechanism on any ordinal type-space and show that local types along with the boundary types form a minimal set of incentive constraints that imply full incentive compatibility.

Suggested Citation

  • Kumar, Ujjwal & Roy, Souvik, 2021. "Local incentive compatibility in ordinal type-spaces," MPRA Paper 110994, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:110994
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    References listed on IDEAS

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    More about this item

    Keywords

    point-wise local incentive compatibility; adjusted local incentive compatibility; uniform local incentive compatibility; (global) incentive compatibility; ordinal type-spaces;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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