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Mechanism design and communication networks

Author

Listed:
  • Tristan Tomala

    (GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique)

  • Ludovic Renou

    (Department of Economics - University of Leicester)

Abstract

This paper characterizes the communication networks for which, in any environment (utilities and beliefs), every incentive compatible social choice function is (partially) implementable. In environments with either common independent beliefs and private values or a bad outcome, we show that any incentive-compatible social choice function is implementable on a given communication network if and only if the network is weakly 2-connected. A network is weakly 2-connected if each player is either directly connected to the designer or indirectly connected to the designer through one of the disjoint path emanating from another player with two disjoint paths to the designer. We couple encryption techniques together with appropriate incentives to secure the transmission of each player's private information to the designer.

Suggested Citation

  • Tristan Tomala & Ludovic Renou, 2010. "Mechanism design and communication networks," Working Papers hal-00540799, HAL.
  • Handle: RePEc:hal:wpaper:hal-00540799
    Note: View the original document on HAL open archive server: https://hal-hec.archives-ouvertes.fr/hal-00540799
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    References listed on IDEAS

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    1. Mathias Dewatripont & Patrick Bolton, 1994. "The firm as a communication network," ULB Institutional Repository 2013/9595, ULB -- Universite Libre de Bruxelles.
    2. Dirk Bergemann & Stephen Morris, 2005. "Robust Mechanism Design," Econometrica, Econometric Society, vol. 73(6), pages 1771-1813, November.
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    Citations

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    Cited by:

    1. repec:eee:jetheo:v:175:y:2018:i:c:p:201-247 is not listed on IDEAS
    2. Peters, Michael & Troncoso-Valverde, Cristián, 2013. "A folk theorem for competing mechanisms," Journal of Economic Theory, Elsevier, vol. 148(3), pages 953-973.
    3. Renault, Jérôme & Renou, Ludovic & Tomala, Tristan, 2014. "Secure message transmission on directed networks," Games and Economic Behavior, Elsevier, vol. 85(C), pages 1-18.
    4. Mohamed Belhaj & Sebastian Bervoets & Frédéric Deroïan, 2013. "Network Design under Local Complementarities," AMSE Working Papers 1309, Aix-Marseille School of Economics, Marseille, France, revised 12 Feb 2013.
    5. Rene Saran & Norovsambuu Tumennasan, 2015. "Implementation by Sortition in Nonexclusive Information Economies," Economics Working Papers 2015-13, Department of Economics and Business Economics, Aarhus University.
    6. Pinghan Liang, 2010. "Transfer of Authority within Hierarchy," Levine's Working Paper Archive 661465000000000139, David K. Levine.
    7. Mohamed Belhaj & Sebastian Bervoets & Frédéric Deroïan, 2013. "Network Design under Local Complementarities," Working Papers halshs-00796487, HAL.

    More about this item

    Keywords

    Mechanism design; incentives; Bayesian equilibrium; communication networks; encryption; secure transmission; coding;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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