IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2403.18694.html
   My bibliography  Save this paper

Designing Simple Mechanisms

Author

Listed:
  • Shengwu Li

Abstract

Which mechanisms are simple to play? When is it easy for participants to see that a mechanism is incentive-compatible? I will start by explaining how and why economists came to ask these questions. Then I will discuss three recent answers, that capture different aspects of what makes a mechanism simple.

Suggested Citation

  • Shengwu Li, 2024. "Designing Simple Mechanisms," Papers 2403.18694, arXiv.org, revised Jul 2024.
    • Handle: RePEc:arx:papers:2403.18694
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2403.18694
    File Function: Latest version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Paul Klemperer, 2010. "The Product-Mix Auction: A New Auction Design for Differentiated Goods," Journal of the European Economic Association, MIT Press, vol. 8(2-3), pages 526-536, 04-05.
    2. Canice Prendergast, 2022. "The Allocation of Food to Food Banks," Journal of Political Economy, University of Chicago Press, vol. 130(8), pages 1993-2017.
    3. Arribillaga, R. Pablo & Massó, Jordi & Neme, Alejandro, 2020. "On obvious strategy-proofness and single-peakedness," Journal of Economic Theory, Elsevier, vol. 186(C).
    4. Paul Milgrom, 2000. "Putting Auction Theory to Work: The Simultaneous Ascending Auction," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 245-272, April.
    5. Benjamin Edelman & Michael Ostrovsky & Michael Schwarz, 2007. "Internet Advertising and the Generalized Second-Price Auction: Selling Billions of Dollars Worth of Keywords," American Economic Review, American Economic Association, vol. 97(1), pages 242-259, March.
    6. Alvin E. Roth, 2002. "The Economist as Engineer: Game Theory, Experimentation, and Computation as Tools for Design Economics," Econometrica, Econometric Society, vol. 70(4), pages 1341-1378, July.
    7. Ashlagi, Itai & Gonczarowski, Yannai A., 2018. "Stable matching mechanisms are not obviously strategy-proof," Journal of Economic Theory, Elsevier, vol. 177(C), pages 405-425.
    8. Hakimov, Rustamdjan & Kübler, Dorothea, 2021. "Experiments on centralized school choice and college admissions: a survey," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 24(2), pages 434-488.
    9. Parag A. Pathak & Tayfun Sonmez, 2008. "Leveling the Playing Field: Sincere and Sophisticated Players in the Boston Mechanism," American Economic Review, American Economic Association, vol. 98(4), pages 1636-1652, September.
    10. Bade, Sophie, 2019. "Matching with single-peaked preferences," Journal of Economic Theory, Elsevier, vol. 180(C), pages 81-99.
    11. Alejandro Martínez-Marquina & Muriel Niederle & Emanuel Vespa, 2019. "Failures in Contingent Reasoning: The Role of Uncertainty," American Economic Review, American Economic Association, vol. 109(10), pages 3437-3474, October.
    12. Susan Athey & Jonathan Levin, 2001. "Information and Competition in U.S. Forest Service Timber Auctions," Journal of Political Economy, University of Chicago Press, vol. 109(2), pages 375-417, April.
    13. Ran I. Shorrer & Sándor Sóvágó, 2023. "Dominated Choices in a Strategically Simple College Admissions Environment," Journal of Political Economy Microeconomics, University of Chicago Press, vol. 1(4), pages 781-807.
    14. Arribillaga, R. Pablo & Massó, Jordi & Neme, Alejandro, 2023. "All sequential allotment rules are obviously strategy-proof," Theoretical Economics, Econometric Society, vol. 18(3), July.
    15. Yves Breitmoser & Sebastian Schweighofer-Kodritsch, 2022. "Obviousness around the clock," Experimental Economics, Springer;Economic Science Association, vol. 25(2), pages 483-513, April.
    16. Marek Pycia & Peter Troyan, 2023. "A Theory of Simplicity in Games and Mechanism Design," Econometrica, Econometric Society, vol. 91(4), pages 1495-1526, July.
    17. Meisner, Vincent & von Wangenheim, Jonas, 2023. "Loss aversion in strategy-proof school-choice mechanisms," Journal of Economic Theory, Elsevier, vol. 207(C).
    18. William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, March.
    19. David Lucking-Reiley, 2000. "Vickrey Auctions in Practice: From Nineteenth-Century Philately to Twenty-First-Century E-Commerce," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 183-192, Summer.
    20. Mackenzie, Andrew, 2020. "A revelation principle for obviously strategy-proof implementation," Games and Economic Behavior, Elsevier, vol. 124(C), pages 512-533.
    21. Glazer, Jacob & Rubinstein, Ariel, 1996. "An Extensive Game as a Guide for Solving a Normal Game," Journal of Economic Theory, Elsevier, vol. 70(1), pages 32-42, July.
    22. Pinaki Mandal & Souvik Roy, 2022. "Obviously Strategy‐Proof Implementation Of Assignment Rules: A New Characterization," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(1), pages 261-290, February.
    23. Bogomolnaia, Anna & Moulin, Herve, 2001. "A New Solution to the Random Assignment Problem," Journal of Economic Theory, Elsevier, vol. 100(2), pages 295-328, October.
    24. Partha Dasgupta & Peter Hammond & Eric Maskin, 1979. "The Implementation of Social Choice Rules: Some General Results on Incentive Compatibility," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 46(2), pages 185-216.
    25. Shengwu Li, 2017. "Obviously Strategy-Proof Mechanisms," American Economic Review, American Economic Association, vol. 107(11), pages 3257-3287, November.
    26. Atila Abdulkadiroğlu & Parag A. Pathak & Alvin E. Roth & Tayfun Sönmez, 2005. "The Boston Public School Match," American Economic Review, American Economic Association, vol. 95(2), pages 368-371, May.
    27. Echenique, Federico & Miyashita, Masaki & Nakamura, Yuta & Pomatto, Luciano & Vinson, Jamie, 2022. "Twofold multiprior preferences and failures of contingent reasoning," Journal of Economic Theory, Elsevier, vol. 202(C).
    28. Peter Troyan, 2019. "Obviously Strategy‐Proof Implementation Of Top Trading Cycles," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(3), pages 1249-1261, August.
    29. Kagel, John H & Levin, Dan, 1993. "Independent Private Value Auctions: Bidder Behaviour in First-, Second- and Third-Price Auctions with Varying Numbers of Bidders," Economic Journal, Royal Economic Society, vol. 103(419), pages 868-879, July.
    30. Niederle, Muriel & Vespa, Emanuel, 2023. "Cognitive Limitations: Failures of Contingent Thinking," University of California at San Diego, Economics Working Paper Series qt5q14p1np, Department of Economics, UC San Diego.
    31. Gibbard, Allan, 1973. "Manipulation of Voting Schemes: A General Result," Econometrica, Econometric Society, vol. 41(4), pages 587-601, July.
    32. Ignacio Esponda Jr. & Emanuel Vespa Jr., 2014. "Hypothetical Thinking and Information Extraction in the Laboratory," American Economic Journal: Microeconomics, American Economic Association, vol. 6(4), pages 180-202, November.
    33. Ronald Harstad, 2000. "Dominant Strategy Adoption and Bidders' Experience with Pricing Rules," Experimental Economics, Springer;Economic Science Association, vol. 3(3), pages 261-280, December.
    34. Elliott Peranson & Alvin E. Roth, 1999. "The Redesign of the Matching Market for American Physicians: Some Engineering Aspects of Economic Design," American Economic Review, American Economic Association, vol. 89(4), pages 748-780, September.
    35. Bnaya Dreyfuss & Ori Heffetz & Matthew Rabin, 2022. "Expectations-Based Loss Aversion May Help Explain Seemingly Dominated Choices in Strategy-Proof Mechanisms," American Economic Journal: Microeconomics, American Economic Association, vol. 14(4), pages 515-555, November.
    36. Paul Milgrom & Ilya Segal, 2020. "Clock Auctions and Radio Spectrum Reallocation," Journal of Political Economy, University of Chicago Press, vol. 128(1), pages 1-31.
    37. Kalyan Chatterjee & William Samuelson, 1983. "Bargaining under Incomplete Information," Operations Research, INFORMS, vol. 31(5), pages 835-851, October.
    38. Camerer, Colin & Loewenstein, George & Weber, Martin, 1989. "The Curse of Knowledge in Economic Settings: An Experimental Analysis," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1232-1254, October.
    39. Rees-Jones, Alex, 2018. "Suboptimal behavior in strategy-proof mechanisms: Evidence from the residency match," Games and Economic Behavior, Elsevier, vol. 108(C), pages 317-330.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yannai A. Gonczarowski & Ori Heffetz & Clayton Thomas, 2022. "Strategyproofness-Exposing Mechanism Descriptions," Papers 2209.13148, arXiv.org, revised Jul 2023.
    2. Mackenzie, Andrew & Zhou, Yu, 2022. "Menu mechanisms," Journal of Economic Theory, Elsevier, vol. 204(C).
    3. Scott Duke Kominers & Alexander Teytelboym & Vincent P Crawford, 2017. "An invitation to market design," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 33(4), pages 541-571.
    4. Marek Pycia & Peter Troyan, 2023. "A Theory of Simplicity in Games and Mechanism Design," Econometrica, Econometric Society, vol. 91(4), pages 1495-1526, July.
    5. Louis Golowich & Shengwu Li, 2021. "On the Computational Properties of Obviously Strategy-Proof Mechanisms," Papers 2101.05149, arXiv.org, revised Oct 2022.
    6. Troyan, Peter & Morrill, Thayer, 2020. "Obvious manipulations," Journal of Economic Theory, Elsevier, vol. 185(C).
    7. Yves Breitmoser & Sebastian Schweighofer-Kodritsch, 2022. "Obviousness around the clock," Experimental Economics, Springer;Economic Science Association, vol. 25(2), pages 483-513, April.
    8. Hu, Xinquan & Yao, Lan, 2024. "Cognitive ability in matching with strategic uncertainty: An experimental study," China Economic Review, Elsevier, vol. 88(C).
    9. Mandal, Pinaki & Roy, Souvik, 2022. "On obviously strategy-proof implementation of fixed priority top trading cycles with outside options," Economics Letters, Elsevier, vol. 211(C).
    10. Yannai A. Gonczarowski & Ori Heffetz & Guy Ishai & Clayton Thomas, 2024. "Describing Deferred Acceptance and Strategyproofness to Participants: Experimental Analysis," Papers 2409.18166, arXiv.org.
    11. Shengwu Li, 2017. "Obviously Strategy-Proof Mechanisms," American Economic Review, American Economic Association, vol. 107(11), pages 3257-3287, November.
    12. Mackenzie, Andrew, 2020. "A revelation principle for obviously strategy-proof implementation," Games and Economic Behavior, Elsevier, vol. 124(C), pages 512-533.
    13. Pablo Guillen & Róbert F. Veszteg, 2021. "Strategy-proofness in experimental matching markets," Experimental Economics, Springer;Economic Science Association, vol. 24(2), pages 650-668, June.
    14. Breitmoser, Yves & Schweighofer-Kodritsch, Sebastian, 2019. "Obviousness around the clock," Discussion Papers, Research Unit: Market Behavior SP II 2019-203, WZB Berlin Social Science Center.
    15. Eric Budish & Estelle Cantillon, 2012. "The Multi-unit Assignment Problem: Theory and Evidence from Course Allocation at Harvard," American Economic Review, American Economic Association, vol. 102(5), pages 2237-2271, August.
    16. Alexander Teytelboym & Shengwu Li & Scott Duke Kominers & Mohammad Akbarpour & Piotr Dworczak, 2021. "Discovering Auctions: Contributions of Paul Milgrom and Robert Wilson," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(3), pages 709-750, July.
    17. Meisner, Vincent & von Wangenheim, Jonas, 2023. "Loss aversion in strategy-proof school-choice mechanisms," Journal of Economic Theory, Elsevier, vol. 207(C).
    18. Shorrer, Ran I. & Sóvágó, Sándor, 2024. "Dominated choices under deferred acceptance mechanism: The effect of admission selectivity," Games and Economic Behavior, Elsevier, vol. 144(C), pages 167-182.
    19. Pablo R. Arribillaga & Jordi Massó & Alejandro Neme, 2023. "Obvious Strategy-proofness with Respect to a Partition," Working Papers 293, Red Nacional de Investigadores en Economía (RedNIE).
    20. Clayton Thomas, 2020. "Classification of Priorities Such That Deferred Acceptance is Obviously Strategyproof," Papers 2011.12367, arXiv.org, revised Feb 2021.

    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2403.18694. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.