On the equivalence between Bayesian and dominant strategy implementation: the case of correlated types
AbstractWe consider general social choice environments with private values and correlated types. Each agent's matrix of conditional probabilities satisfies the full rank condition. We show that for any Bayesian incentive compatible mechanism there exists a dominant strategy incentive compatible mechanism that delivers the same interim expected utilities to all agents and generates at least the same social surplus. In addition, if there is a social alternative that is inferior to the other alternatives for all agents the dominant strategy incentive compatible mechanism matches exactly the social surplus. These results extend to environments with interdependent values satisfying the single crossing condition.
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Bibliographic InfoPaper provided by Department of Economics - University of Zurich in its series ECON - Working Papers with number 129.
Date of creation: Aug 2013
Date of revision:
Mechanism design; Bayesian implementation; dominant strategy implementation; full surplus extraction; correlation;
Find related papers by JEL classification:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-08-23 (All new papers)
- NEP-CTA-2013-08-23 (Contract Theory & Applications)
- NEP-GTH-2013-08-23 (Game Theory)
- NEP-MIC-2013-08-23 (Microeconomics)
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