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Participation Security and Elementary Mechanisms

Author

Listed:
  • Benjamin Brooks

    (Department of Economics, University of Chicago)

  • Songzi Du

    (Department of Economics, University of California San Diego)

Abstract

A mechanism is participation secure if each agent has an action that guarantees them a payoff better than their outside option, no matter how other agents behave and no matter how uncertainty about preferences is resolved. Participation security implies that every agent’s interim payoff exceeds their outside option, in every information structure and equilibrium. The converse is true if the mechanism is elementary: Every action is the unique best response for some type in some information structure and equilibrium. Elementary mechanisms are shown to be a sufficient class for maximizing the welfare guarantee. Hence, for maximizing the guarantee, participation security is equivalent to interim participation in all information structures and equilibria.

Suggested Citation

  • Benjamin Brooks & Songzi Du, 2026. "Participation Security and Elementary Mechanisms," Working Papers 2026-126, Becker Friedman Institute for Research In Economics.
    • Handle: RePEc:bfi:wpaper:2026-126
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    File URL: https://bfi.uchicago.edu/wp-content/uploads/2026/09/BFI_WP_2026-126.pdf
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    Keywords

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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • 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

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