We study a principal–agent model in which the agent is boundedly rational in his ability to understand the principal's decision rule. The principal wishes to elicit an agent's true profile so as to determine whether or not to grant him a certain request. The principal designs a questionnaire and commits himself to accepting certain responses. In designing such a questionnaire, the principal takes into account the bounded rationality of the agent and wishes to reduce the success probability of a dishonest agent who is trying to game the system. It is shown that the principal can construct a sufficiently complex questionnaire that will allow him to respond optimally to agents who tell the truth and at the same time to almost eliminate the probability that a dishonest agent will succeed in cheating.
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- Geoffroy de Clippel, 2012.
2012-6, Brown University, Department of Economics.
- Kfir Eliaz, 2002. "Fault Tolerant Implementation," Review of Economic Studies, Oxford University Press, vol. 69(3), pages 589-610.
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- Cabrales, Antonio & Serrano, Roberto, 2011. "Implementation in adaptive better-response dynamics: Towards a general theory of bounded rationality in mechanisms," Games and Economic Behavior, Elsevier, vol. 73(2), pages 360-374.
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