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

  • Cason, Timothy N.
  • Saijo, Tatsuyoshi
  • Sjostrom, Tomas
  • Yamato, Takehiho

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.

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Paper provided by California Institute of Technology, Division of the Humanities and Social Sciences in its series Working Papers with number 1165.

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Length: 50 pages
Date of creation: May 2003
Date of revision:
Publication status: Published:
Handle: RePEc:clt:sswopa:1165
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