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Truth-telling, dominant strategies, and iterative Groves mechanisms

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  • Susan Cohen

Abstract

This essay demonstrates that if an organization uses a price-decomposition algorithm to solve a decentralized resource allocation problem, in which rewards are those of a Groves mechanism, then truth-telling remains a dominant-strategy equilibrium. Earlier work shows that for a general class of non-linear programming algorithms, truth-telling is a Nash equilibrium that weakly dominates all other Nash equilibria, but it is not necessarily a dominant-strategy equilibrium. Copyright Martinus Nijhoff Publishers 1986

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  • Susan Cohen, 1986. "Truth-telling, dominant strategies, and iterative Groves mechanisms," Public Choice, Springer, vol. 51(3), pages 333-343, January.
    • Handle: RePEc:kap:pubcho:v:51:y:1986:i:3:p:333-343
    DOI: 10.1007/BF00128881
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    1. Groves, Theodore & Ledyard, John O, 1977. "Optimal Allocation of Public Goods: A Solution to the "Free Rider" Problem," Econometrica, Econometric Society, vol. 45(4), pages 783-809, May.
    2. John Roberts, 1979. "Incentives in Planning Procedures for the Provision of Public Goods," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 46(2), pages 283-292.
    3. E. Malinvaud, 1967. "Decentralized Procedures for Planning," International Economic Association Series, in: E. Malinvaud & M. O. L. Bacharach (ed.), Activity Analysis in the Theory of Growth and Planning, chapter 0, pages 170-208, Palgrave Macmillan.
    4. Charles R. Plott & Vernon L. Smith, 1978. "An Experimental Examination of Two Exchange Institutions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 45(1), pages 133-153.
    5. Cohen, Susan I, 1980. "Incentives and the Choice of Optimal Plans," American Economic Review, American Economic Association, vol. 70(4), pages 756-762, September.
    6. E. Malinvaud, 1971. "A Planning Approach to the Public Good Problem," Palgrave Macmillan Books, in: Peter Bohm & Allen V. Kneese (ed.), The Economics of Environment, pages 77-93, Palgrave Macmillan.
    7. Cohen, Susan I., 1980. "Incentives, iterative communication, and organizational control," Journal of Economic Theory, Elsevier, vol. 22(1), pages 37-55, February.
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    Cited by:

    1. Edna Tusak Loehman & Richard Kiser & Stephen J. Rassenti, 2014. "Cost Share Adjustment Processes for Cooperative Group Decisions About Shared Goods: A Design Approach," Group Decision and Negotiation, Springer, vol. 23(5), pages 1085-1126, September.
    2. Walther, Grit & Schmid, Eberhard & Spengler, Thomas S., 2008. "Negotiation-based coordination in product recovery networks," International Journal of Production Economics, Elsevier, vol. 111(2), pages 334-350, February.

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