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A Network Solution to Robust Implementation: The Case of Identical but Unknown Distributions

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  • Mariann Ollár
  • Antonio Penta

Abstract

We consider mechanism design environments in which agents commonly know that others’ types are identically distributed, but without assuming that the actual distribution is common knowledge, nor that it is known to the designer (common knowledge of identicality). Under these assumptions, we study problems of partial and full implementation, as well as robustness. First, we characterize the transfers which are incentive compatible under these common knowledge assumption, and provide necessary and sufficient conditions for partial implementation. Second, we characterize the conditions under which full implementation is possible via direct mechanisms, as well as transfer schemes which achieve it whenever possible. We do this by pursuing a network approach, which is based on the observation that the full implementation problem in our setting can be conveniently transformed into one of designing a network of strategic externalities, subject to suitable constraints which are dictated by the incentive compatibility requirements.

Suggested Citation

  • Mariann Ollár & Antonio Penta, 2021. "A Network Solution to Robust Implementation: The Case of Identical but Unknown Distributions," Working Papers 1248, Barcelona School of Economics.
  • Handle: RePEc:bge:wpaper:1248
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    Cited by:

    1. Ollar, Mariann & Penta, Antonio, 2021. "Efficient Full Implementation via Transfers: Uniqueness and Sensitivity in Symmetric Environments," TSE Working Papers 21-1262, Toulouse School of Economics (TSE).
    2. Ryan Kor & Junjie Zhou, 2022. "Welfare and Distributional Effects of Joint Intervention in Networks," Papers 2206.03863, arXiv.org.
    3. Emiliano Catonini & Antonio Penta, 2022. "Backward Induction Reasoning beyond Backward Induction," Working Papers 1315, Barcelona School of Economics.
    4. Nicholas C Bedard & Jacob K Goeree & Ningyi Sun, 2023. "Multivariate Majorization in Principal-Agents Models," Papers 2308.13804, arXiv.org.
    5. Catonini, Emiliano & Penta, Antonio, 2022. "Backward Induction Reasoning beyond Backward Induction," TSE Working Papers 22-1298, Toulouse School of Economics (TSE).
    6. Emiliano Cantonini & Antonio Penta, 2022. "Backward induction reasoning beyond backward induction," Economics Working Papers 1815, Department of Economics and Business, Universitat Pompeu Fabra.
    7. Mariann Ollár & Antonio Penta, 2022. "Efficient Full Implementation via Transfers: Uniqueness and Sensitivity in Symmetric Environments," Working Papers 1311, Barcelona School of Economics.

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    More about this item

    Keywords

    robust full implementation; Rationalizability; network design; uniqueness; strategic externalities; spectral radius;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • 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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