Bayesian and Dominant Strategy Implementation Revisited
AbstractWe consider a standard social choice environment with linear utility and one-dimensional types. We show by counterexample that, when there are at least three physical alternatives, Bayes-Nash Incentive Compatibility (BIC) and Dominant Strategy Incentive Compatibility (DIC) need no longer be equivalent. The example with three alternatives is minimal since we do obtain a general equivalence result for settings with only two social alternatives. Our negative result does not mathematically contradict the Manelli and Vincent (2010) equivalence obtained in a one-object auction setting, but it shows that BIC-DIC equivalence is only valid in restrictive environments. Our insights are based on mathematical results about the existence of monotone measures with given monotone marginals.
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Bibliographic InfoPaper provided by University of Toronto, Department of Economics in its series Working Papers with number tecipa-422.
Length: 15 pages
Date of creation: 10 Feb 2011
Date of revision:
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Bayesian Implementation; Dominant Strategy Implementation; Equivalence;
Find related papers by JEL classification:
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-19 (All new papers)
- NEP-CIS-2011-02-19 (Confederation of Independent States)
- NEP-CTA-2011-02-19 (Contract Theory & Applications)
- NEP-GTH-2011-02-19 (Game Theory)
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- Csapó Gergely & Müller Rudolf, 2012. "Optimal mechanism design for the private supply of a public good," Research Memoranda 038, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization.
- Jacob K. Goeree & Alexey Kushnir, 2011. "On the equivalence of Bayesian and dominant strategy implementation in a general class of social choice problems," ECON - Working Papers 021, Department of Economics - University of Zurich.
- Yeon-Koo Che & Jinwoo Kim & Konrad Mierendorff, 2011. "Generalized reduced-form auctions: a network-flow approach," ECON - Working Papers 031, Department of Economics - University of Zurich, revised Mar 2013.
- Jacob K. Goeree & Alexey Kushnir, 2011. "A geometric approach to mechanism design," ECON - Working Papers 056, Department of Economics - University of Zurich.
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