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Dominant Strategy Implementation in Economic Environments

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  • Hideki Mizukami
  • Takuma Wakayama

Abstract

We study dominant strategy implementation especially in economic environments. We first show that in general environments, strategy-proofness and quasi-strong-non-bossiness together are necessary and sufficient for dominant strategy implementation via the associated direct revelationmechanism. We next prove that in weak separable environments, strategy-proofness is sufficient for dominant strategy implementation, by using an augmented revelation mechanism similar to the one devised by Jackson et al. (1994). Moreover, we focus on pure exchange economies without free disposal, and try to construct another augmented revelation mechanism that satisfies balancedness in and out of equilibrium, and which implements all strategy-proof social choice functions in dominant strategy equilibria.

Suggested Citation

  • Hideki Mizukami & Takuma Wakayama, 2006. "Dominant Strategy Implementation in Economic Environments," ISER Discussion Paper 0669, Institute of Social and Economic Research, Osaka University.
  • Handle: RePEc:dpr:wpaper:0669
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    References listed on IDEAS

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    1. Palfrey, Thomas R & Srivastava, Sanjay, 1989. "Implementation with Incomplete Information in Exchange Economies," Econometrica, Econometric Society, vol. 57(1), pages 115-134, January.
    2. Dirk Bergemann & Stephen Morris, 2005. "Robust Implementation: The Role of Large Type Spaces," Levine's Bibliography 784828000000000116, UCLA Department of Economics.
    3. Barbera, Salvador & Jackson, Matthew O, 1995. "Strategy-Proof Exchange," Econometrica, Econometric Society, vol. 63(1), pages 51-87, January.
    4. Saijo, Tatsuyoshi & Sjostrom, Tomas & Yamato, Takehiko, 2007. "Secure implementation," Theoretical Economics, Econometric Society, vol. 2(3), September.
    5. Ritz, Zvi, 1983. "Restricted domains, arrow-social welfare functions and noncorruptible and non-manipulable social choice correspondences: The case of private alternatives," Mathematical Social Sciences, Elsevier, vol. 4(2), pages 155-179, April.
    6. Matthew O. Jackson, 1992. "Implementation in Undominated Strategies: A Look at Bounded Mechanisms," Review of Economic Studies, Oxford University Press, vol. 59(4), pages 757-775.
    7. Jackson Matthew O. & Palfrey Thomas R. & Srivastava Sanjay, 1994. "Undominated Nash Implementation in Bounded Mechanisms," Games and Economic Behavior, Elsevier, vol. 6(3), pages 474-501, May.
    8. Dilip Mookherjee & Stefan Reichelstein, 1990. "Implementation via Augmented Revelation Mechanisms," Review of Economic Studies, Oxford University Press, vol. 57(3), pages 453-475.
    9. Matthew O. Jackson, 2001. "A crash course in implementation theory," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 18(4), pages 655-708.
    10. Partha Dasgupta & Peter Hammond & Eric Maskin, 1979. "The Implementation of Social Choice Rules: Some General Results on Incentive Compatibility," Review of Economic Studies, Oxford University Press, vol. 46(2), pages 185-216.
    11. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    12. Postlewaite, Andrew & Schmeidler, David, 1986. "Implementation in differential information economies," Journal of Economic Theory, Elsevier, vol. 39(1), pages 14-33, June.
    13. Sjostrom Tomas, 1994. "Implementation in Undominated Nash Equilibria without Integer Games," Games and Economic Behavior, Elsevier, vol. 6(3), pages 502-511, May.
    14. Lin Zhou, 1990. "Inefficiency of Strategy-Proof Allocation Mechanisms in Pure Exchange Economies," Cowles Foundation Discussion Papers 954, Cowles Foundation for Research in Economics, Yale University.
    15. Saijo, Tatsuyoshi & Tatamitani, Yoshikatsu & Yamato, Takehiko, 1996. "Toward Natural Implementation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(4), pages 949-980, November.
    16. Laffont, Jean-Jacques & Maskin, Eric, 1982. "Nash and dominant strategy implementation in economic environments," Journal of Mathematical Economics, Elsevier, vol. 10(1), pages 17-47, June.
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    Cited by:

    1. William Thomson, 2016. "Non-bossiness," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 47(3), pages 665-696, October.
    2. Yuji Fujinaka & Takuma Wakayama, 2011. "Secure implementation in Shapley–Scarf housing markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 48(1), pages 147-169, September.
    3. Dolors Berga & Bernardo Moreno, 2009. "Strategic requirements with indifference: single-peaked versus single-plateaued preferences," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 32(2), pages 275-298, February.
    4. Saran, Rene, 2016. "Bounded depths of rationality and implementation with complete information," Journal of Economic Theory, Elsevier, vol. 165(C), pages 517-564.
    5. Kumano, Taro & Watabe, Masahiro, 2012. "Dominant strategy implementation of stable rules," Games and Economic Behavior, Elsevier, vol. 75(1), pages 428-434.
    6. Kumano, Taro & Watabe, Masahiro, 2011. "Untruthful dominant strategies for the deferred acceptance algorithm," Economics Letters, Elsevier, vol. 112(2), pages 135-137, August.
    7. repec:spr:etbull:v:3:y:2015:i:2:d:10.1007_s40505-014-0050-8 is not listed on IDEAS
    8. Salvador Barberà, 2010. "Strategy-proof social choice," UFAE and IAE Working Papers 828.10, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    9. Katsuhiko Nishizaki, 2013. "No-envy and dominant strategy implementability in non-excludable public good economies with quasi-linear preferences," Economics Bulletin, AccessEcon, vol. 33(1), pages 557-563.

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