Secure Implementation: Strategy-Proof Mechanisms Reconsidered
Strategy-proofness, requiring that truth-telling is a dominant strategy, is a standard concept in social choice theory. However, the concept of strategy-proofness has serious drawbacks. First, announcing one's true preference may not be a unique dominant strategy, and using the wrong dominant strategy may lead to the wrong outcome. Second, almost all strategy-proof mechanisms have a continuum of Nash equilibria, and most of which produce the wrong outcome. Third, experimental evidence shows that most of the strategy-proof mechanisms do not work well. We argue that a possible solution to this dilemma is to require double implementation in Nash equilibrium and in dominant strategies, which we call secure implementation. We characterize environments where secure implementation is possible, and compare it with dominant strategy implementation. An interesting example of secure implementation is a Groves mechanism when preferences are single-peaked.
|Date of creation:||Sep 2003|
|Contact details of provider:|| Postal: Working Paper Assistant, Division of the Humanities and Social Sciences, 228-77, Caltech, Pasadena CA 91125|
Phone: 626 395-4065
Fax: 626 405-9841
Web page: http://www.hss.caltech.edu/ss
|Order Information:|| Postal: Working Paper Assistant, Division of the Humanities and Social Sciences, 228-77, Caltech, Pasadena CA 91125|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Laura Razzolini & Michael Reksulak & Robert Dorsey, 2007.
"An Experimental Evaluation of the Serial Cost Sharing Rule,"
Theory and Decision,
Springer, vol. 63(3), pages 283-314, November.
- Laura Razzolini & Michael Reksulak & Robert Dorsey, 2004. "An Experimental Evaluation of the Serial Cost Sharing Rule," Working Papers 0402, VCU School of Business, Department of Economics.
- Moulin, Herve & Shenker, Scott, 1992. "Serial Cost Sharing," Econometrica, Econometric Society, vol. 60(5), pages 1009-1037, September.
- Rafael Repullo, 1985. "Implementation in Dominant Strategies under Complete and Incomplete Information," Review of Economic Studies, Oxford University Press, vol. 52(2), pages 223-229.
- Kawagoe, Toshiji & Mori, Toru, 2001. "Can the Pivotal Mechanism Induce Truth-Telling? An Experimental Study," Public Choice, Springer, vol. 108(3-4), pages 331-354, September.
- Barbera, S. & Masso, J. & Serizawa, S., 1998. "Strategy-Proof Voting on Compact Ranges," Games and Economic Behavior, Elsevier, vol. 25(2), pages 272-291, November.
- Masso, J. & Barbera, S., 1996. "Strategy-Proof Voting on Compact Ranges," ASSET - Instituto De Economia Publica 156, ASSET (Association of Southern European Economic Theorists).
- Barbera, S & Masso, J & Serizawa, S, 1996. "Strategy-Proof Voting on Compact Ranges," UFAE and IAE Working Papers 358.96, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Schummer, James & Vohra, Rakesh V., 2002. "Strategy-proof Location on a Network," Journal of Economic Theory, Elsevier, vol. 104(2), pages 405-428, June.
- James Schummer & Rakesh V. Vohra, 1999. "Strategy-proof Location on a Network," Discussion Papers 1253, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Attiyeh, Greg & Franciosi, Robert & Isaac, R Mark, 2000. "Experiments with the Pivot Process for Providing Public Goods," Public Choice, Springer, vol. 102(1-2), pages 95-114, January.
- Chen, Yan, 2003. "An experimental study of serial and average cost pricing mechanisms," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 2305-2335, September.
- Kagel, John H & Harstad, Ronald M & Levin, Dan, 1987. "Information Impact and Allocation Rules in Auctions with Affiliated Private Values: A Laboratory Study," Econometrica, Econometric Society, vol. 55(6), pages 1275-1304, November.
- Sjostrom, Tomas & Yamato, Takehiko & Saijo, Tatsuyoshi, 2007. "Secure implementation," Theoretical Economics, Econometric Society, vol. 2(3), September.
- Tatsuyoshi Saijo & Tomas Sjöström & Takehiko Yamato, 2004. "Secure Implementation," Levine's Bibliography 122247000000000615, UCLA Department of Economics.
- Tatsuyoshi Saijo & Tomas Sjostrom & Takehiko Yamato, 2005. "Secure Implementation," Economics Working Papers 0056, Institute for Advanced Study, School of Social Science.
- Cason, Timothy N. & Saijo, Tatsuyoshi & Sjostrom, Tomas & Yamato, Takehiko, 2006. "Secure implementation experiments: Do strategy-proof mechanisms really work?," Games and Economic Behavior, Elsevier, vol. 57(2), pages 206-235, November.
- Hervé Moulin, 1994. "Serial Cost-Sharing of Excludable Public Goods," Review of Economic Studies, Oxford University Press, vol. 61(2), pages 305-325.
- 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.
- Kagel, J.H. & Levin, D., 1988. "Independent Private Value Auctions: Bidder Behavior In First, Second And Third-Price Auctions With Varying Numbers Of Bidders," Papers 13, Houston - Department of Economics.
- Groves, Theodore, 1973. "Incentives in Teams," Econometrica, Econometric Society, vol. 41(4), pages 617-631, July.
- H. Moulin, 1980. "On strategy-proofness and single peakedness," Public Choice, Springer, vol. 35(4), pages 437-455, January.
- Dilip Mookherjee & Stefan Reichelstein, 1990. "Implementation via Augmented Revelation Mechanisms," Review of Economic Studies, Oxford University Press, vol. 57(3), pages 453-475.
- Kim C. Border & J. S. Jordan, 1983. "Straightforward Elections, Unanimity and Phantom Voters," Review of Economic Studies, Oxford University Press, vol. 50(1), pages 153-170. Full references (including those not matched with items on IDEAS)