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Approximate implementation in Markovian environments

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  • Renou, Ludovic
  • Tomala, Tristan

Abstract

This paper considers dynamic implementation problems in environments with changing private information (according to Markov processes). A social choice function is approximately implementable if it is correctly implemented an arbitrary large number of times with arbitrary high probability in all (communication) equilibria. We show that if a social choice function is strictly efficient in the set of social choice functions that satisfy an undetectability condition, then it is approximately implementable.

Suggested Citation

  • Renou, Ludovic & Tomala, Tristan, 2015. "Approximate implementation in Markovian environments," Journal of Economic Theory, Elsevier, vol. 159(PA), pages 401-442.
  • Handle: RePEc:eee:jetheo:v:159:y:2015:i:pa:p:401-442
    DOI: 10.1016/j.jet.2015.07.009
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    References listed on IDEAS

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    1. Radner, Roy, 1985. "Repeated Principal-Agent Games with Discounting," Econometrica, Econometric Society, vol. 53(5), pages 1173-1198, September.
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    7. Glynn, Peter W. & Ormoneit, Dirk, 2002. "Hoeffding's inequality for uniformly ergodic Markov chains," Statistics & Probability Letters, Elsevier, vol. 56(2), pages 143-146, January.
    8. Matsushima, Hitoshi, 1988. "A new approach to the implementation problem," Journal of Economic Theory, Elsevier, vol. 45(1), pages 128-144, June.
    9. Mailath George J. & Matthews Steven A. & Sekiguchi Tadashi, 2002. "Private Strategies in Finitely Repeated Games with Imperfect Public Monitoring," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 2(1), pages 1-23, June.
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    Cited by:

    1. Juan I. Block & David K. Levine, 2016. "Codes of conduct, private information and repeated games," International Journal of Game Theory, Springer;Game Theory Society, vol. 45(4), pages 971-984, November.
    2. Juan F. Escobar & Gastón Llanes, 2015. "Cooperation Dynamic in Repeated Games of Adverse Selection," Documentos de Trabajo 311, Centro de Economía Aplicada, Universidad de Chile.
    3. Bruno Sultanum, 2014. "Financial fragility and over-the-counter markets," 2014 Papers psu420, Job Market Papers.
    4. Chandrasekher, Madhav, 2015. "Unraveling in a repeated moral hazard model with multiple agents," Theoretical Economics, Econometric Society, vol. 10(1), January.
    5. Mezzetti, Claudio & Renou, Ludovic, 2017. "Repeated Nash implementation," Theoretical Economics, Econometric Society, vol. 12(1), January.

    More about this item

    Keywords

    Implementation; Undetectability; Efficiency; Dynamic; Mechanism design; Markov processes;

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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