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Secure Implementation Experiments: Do Strategy-proof Mechanisms Really Work?

Author

Listed:
  • Timothy N. Cason

    () (Department of Economics, Purdue University)

  • Tatsuyoshi Saijo

    () (Osaka University)

  • Tomas Sjostrom

    () (Department of Economics, Rutgers University)

  • Takehiko Yamato

    () (Department of Value & Decision Science, Tokyo Institute of Technology)

Abstract

Strategy-proofness, requiring that truth-telling is a dominant strategy, is a standard concept used in social choice theory. Saijo et al. (2003) argue that this concept has serious drawbacks. In particular, many strategy-proof mechanisms have a continuum of Nash equilibria, including equilibria other than dominant strategy equilibria. For only a subset of strategy-proof mechanisms do the set of Nash equilibria and the set of dominant strategy equilibria coincide. For example, this double coincidence occurs in the Groves mechanism when preferences are single-peaked. We report experiments using two strategy-proof mechanisms. One of them has a large number of Nash equilibria, but the other has a unique Nash equilibrium. We found clear differences in the rate of dominant strategy play between the two.

Suggested Citation

  • Timothy N. Cason & Tatsuyoshi Saijo & Tomas Sjostrom & Takehiko Yamato, 2005. "Secure Implementation Experiments: Do Strategy-proof Mechanisms Really Work?," Economics Working Papers 0055, Institute for Advanced Study, School of Social Science.
  • Handle: RePEc:ads:wpaper:0055
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    References listed on IDEAS

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    Keywords

    Experiment; Laboratory; Secure Implementation; Groves-Clarke; Pivotal; Learning;

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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