The Interplay Between Incentives and Communication Complexity in Mechanism Design
AbstractThe curse of the Revelation Principle is that it leads us to focus on unrealistic mechanisms in which agents report all private information to the principal, who then makes all decisions centrally. This is not true when communication costs are introduced. Then partial communication of information, sequential back-and-forth conversations, and decentralization of decisions become part of optimal mechanisms. This paper looks at the interplay between the incentive constraints and the communication constraints. When can they be separated, so that e.g. one can separately study the incentive compatibility of a social choice rule and the minimum-cost communication protocol that realizes the social choice rule?
Download InfoIf 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.
Bibliographic InfoPaper provided by Society for Economic Dynamics in its series 2008 Meeting Papers with number 480.
Date of creation: 2008
Date of revision:
Contact details of provider:
Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
Web page: http://www.EconomicDynamics.org/society.htm
More information through EDIRC
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.:
- Michel Poitevin, 2000.
"Can the theory of incentives explain decentralization?,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 33(4), pages 878-906, November.
- Poitevin, M., 2000. "Can the Theory of Incentives Explain Devcentralization?," Cahiers de recherche 2000-13, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Michel Poitevin, 2000. "Can the Theory of Incentives Explain Decentralization?," CIRANO Working Papers 2000s-32, CIRANO.
- Nisan, Noam & Segal, Ilya, 2006. "The communication requirements of efficient allocations and supporting prices," Journal of Economic Theory, Elsevier, vol. 129(1), pages 192-224, July.
- Dilip Mookherjee, 2005.
"Decentralization, Hierarchies and Incentives: A Mechanism Design Perspective,"
Boston University - Department of Economics - Working Papers Series
WP2005-034, Boston University - Department of Economics, revised Sep 2005.
- Dilip Mookherjee, 2006. "Decentralization, Hierarchies, and Incentives: A Mechanism Design Perspective," Journal of Economic Literature, American Economic Association, vol. 44(2), pages 367-390, June.
- Timothy Van Zandt, 2007. "Communication Complexity and Mechanism Design," Journal of the European Economic Association, MIT Press, vol. 5(2-3), pages 543-553, 04-05.
- Melumad, Nahum & Mookherjee, Dilip & Reichelstein, Stefan, 1992. "A theory of responsibility centers," Journal of Accounting and Economics, Elsevier, vol. 15(4), pages 445-484, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann).
If references are entirely missing, you can add them using this form.