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Natural Implementation with Partially Honest Agents

  • Lombardi, Michele
  • Yoshihara, Naoki

The paper proposes necessary and suffi cient conditions for the natural implementation of (efficient) social choice correspondences (SCCs) in pure finite exchange economies when some of the agents are partially honest. A partially honest agent is an agent who strictly prefers to tell the truth when lying has no better material consequences for her. Firstly, it is shown that if there is even one partially honest agent in the economy (and the planner does not know her identity), then any SCC is Nash implementable by a natural price-allocation mechanism. Secondly, and in sharp contrast with the results of conventional models of natural implementation, it is shown that the equivalence relationship between natural price-allocation mechanisms and natural price-quantity2 mechanisms no longer holds. Finally, and even more strikingly, the paper reports that the class of implementable SCCs by natural price-quantity mechanisms is significantly enlarged.

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File URL: http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/22175/1/DP561.pdf
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Paper provided by Institute of Economic Research, Hitotsubashi University in its series Discussion Paper Series with number 561.

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Length: 38 p.
Date of creation: Feb 2012
Date of revision:
Handle: RePEc:hit:hituec:561
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  1. Jon Elster, 1998. "Emotions and Economic Theory," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 47-74, March.
  2. Michele Lombardi & Naoki Yoshihara, 2013. "A full characterization of nash implementation with strategy space reduction," Economic Theory, Springer, vol. 54(1), pages 131-151, September.
  3. Kfir Eliaz, 2002. "Fault Tolerant Implementation," Review of Economic Studies, Oxford University Press, vol. 69(3), pages 589-610.
  4. Dutta, Bhaskar & Sen, Arunava, 2009. "Nash Implementation with Partially Honest Individuals," The Warwick Economics Research Paper Series (TWERPS) 920, University of Warwick, Department of Economics.
  5. Antonio Cabrales & Roberto Serrano, 2007. "Implementation in Adaptive Better-Response Dynamics," Economics Working Papers we075731, Universidad Carlos III, Departamento de Economía.
  6. Eliaz, Kfir, 2002. "Fault Tolerant Implementation," Review of Economic Studies, Wiley Blackwell, vol. 69(3), pages 589-610, July.
  7. Saijo, T. & Tatamitani, Y. & Yamato, T., 1994. "Toward Natural Implementation," ISER Discussion Paper 0340, Institute of Social and Economic Research, Osaka University.
    • 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 949-80, November.
  8. Lombardi, Michele & Yoshihara, Naoki, 2011. "Partially-honest Nash implementation: Characterization results," Discussion Paper Series 555, Institute of Economic Research, Hitotsubashi University.
  9. Samuel Bowles & Herbert Gintis, 2000. "Walrasian Economics in Retrospect," UMASS Amherst Economics Working Papers 2000-04, University of Massachusetts Amherst, Department of Economics.
  10. Saijo, Tatsuyoshi & Tatamitani, Yoshikatsu & Yamato, Takehiko, 1999. "Characterizing Natural Implementability: The Fair and Walrasian Correspondences," Games and Economic Behavior, Elsevier, vol. 28(2), pages 271-293, August.
  11. Jackson, Matthew O., 1999. "A Crash Course in Implementation Theory," Working Papers 1076, California Institute of Technology, Division of the Humanities and Social Sciences.
  12. 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.
  13. Kotaro Suzumura & Yongsheng Xu, 1999. "Characterizations of Consenquentialism and Non-consequentialism," Discussion Paper Series a365, Institute of Economic Research, Hitotsubashi University.
  14. Eric Maskin, 1998. "Nash Equilibrium and Welfare Optimality," Harvard Institute of Economic Research Working Papers 1829, Harvard - Institute of Economic Research.
  15. Bhaskar Dutta & Arunava Sen & Rajiv Vohra, 1994. "Nash implementation through elementary mechanisms in economic environments," Review of Economic Design, Springer, vol. 1(1), pages 173-203, December.
  16. Lombardi, Michele & Yoshihara, Naoki, 2012. "Natural Implementation with Partially Honest Agents," Discussion Paper Series 561, Institute of Economic Research, Hitotsubashi University.
  17. Sen, A., 1996. "Maximisation and the Act of Choice," Papers 270, Banca Italia - Servizio di Studi.
  18. Kreps, David M, 1997. "Intrinsic Motivation and Extrinsic Incentives," American Economic Review, American Economic Association, vol. 87(2), pages 359-64, May.
  19. Luis Corchón & Carmen Herrero, 2004. "A decent proposal," Spanish Economic Review, Springer, vol. 6(2), pages 107-125, 07.
  20. Glazer, Jacob & Rubinstein, Ariel, 1998. "Motives and Implementation: On the Design of Mechanisms to Elicit Opinions," Journal of Economic Theory, Elsevier, vol. 79(2), pages 157-173, April.
  21. Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall.
  22. Tatsuyoshi Saijo & Yoshikatsu Tatamitani & Takehiko Yamato, 1996. "Natural Implementation With A Simple Punishment," The Japanese Economic Review, Japanese Economic Association, vol. 47(2), pages 170-185, 06.
  23. Tatamitani, Yoshikatsu, 2001. "Implementation by self-relevant mechanisms," Journal of Mathematical Economics, Elsevier, vol. 35(3), pages 427-444, June.
  24. Saijo, Tatsuyoshi, 1988. "Strategy Space Reduction in Maskin's Theorem: Sufficient Conditions for Nash Implementation," Econometrica, Econometric Society, vol. 56(3), pages 693-700, May.
  25. Kartik, Navin & Tercieux, Olivier, 2012. "Implementation with evidence," Theoretical Economics, Econometric Society, vol. 7(2), May.
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