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Implementation with partial provability

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  • Ben-Porath, Elchanan
  • Lipman, Barton L.

Abstract

We extend implementation theory by allowing the social choice function to depend on more than just the preferences of the agents and allowing agents to support their statements with hard evidence. We show that a simple condition on evidence is necessary for the implementation of a social choice function f when the preferences of the agents are state independent and sufficient for implementation for any preferences (including state dependent) with at least three agents if the social planner can perform small monetary transfers beyond those called for by f. If transfers can be large, f can be implemented in a game with perfect information when there are at least two players under a boundedness assumption. For both results, transfers only occur out of equilibrium. The use of evidence enables implementation which is robust in the sense that the planner needs little information about agentsʼ preferences or beliefs and agents need little information about each othersʼ preferences. Our results are robust to evidence forgery at any strictly positive cost.

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Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 147 (2012)
Issue (Month): 5 ()
Pages: 1689-1724

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Handle: RePEc:eee:jetheo:v:147:y:2012:i:5:p:1689-1724
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622869

Keywords: Implementation; Hard evidence; Mechanism design;

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Find related papers by JEL classification:
  • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
  • D7 - Microeconomics - - Analysis of Collective Decision-Making

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Cited by:

  1. Itai Sher & Rakesh Vohra, 2011. "Price Discrimination Through Communication," Discussion Papers 1536, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  2. Makoto Shimoji & Paul Schweinzer, 2012. "Implementation without Incentive Compatibility: Two Stories with Partially Informed Planners," Discussion Papers 12/21, Department of Economics, University of York.
  3. Sher, Itai, 2014. "Persuasion and dynamic communication," Theoretical Economics, Econometric Society, vol. 9(1), January.
  4. Kartik, Navin & Tercieux, Olivier & Holden, Richard, 2014. "Simple mechanisms and preferences for honesty," Games and Economic Behavior, Elsevier, vol. 83(C), pages 284-290.
  5. Midjord, Rune, 2012. "Full Implementation of Rank Dependent Prizes," DFAEII Working Papers 2012-15, University of the Basque Country - Department of Foundations of Economic Analysis II.
  6. Midjord, Rune, 2013. "Full implementation of rank-dependent prizes," Economics Letters, Elsevier, vol. 119(3), pages 261-263.

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