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Partially-honest Nash Implementation with Non-connected Honesty Standards

Author

Listed:
  • Lombardi, Michele
  • Yoshihara, Naoki

Abstract

An individual may display an honesty standard which allows her to lie a little without that being harmful to her self view as an honest person. On this basis, the paper considers a society with a finite number of individuals involving partially-honest individuals and in which every individual has her own honesty standard. An individual honesty standard is modeled as a subgroup of the society, including the individual herself. A partially-honest individual is an individual who strictly prefers to tell the truth prescribed by her honesty standard whenever lying has no effect on her material well-being. The paper studies the impact of placing honesty standard restrictions on the mechanism designer for Nash implementation problems of that society. It offers a necessary condition for Nash implementation, called partial-honesty monotonicity, and shows that in an independent domain of preferences that condition is equivalent to Maskin monotonicity, provided that honesty standards of society are non-connected. They are non-connected if every individual is excluded from the honesty standard of another individual. Finally, it shows that the limitations imposed by Maskin monotonicity can be circumvented by a q-mechanism (Lombardi and Yoshihara, 2013) provided that there are at least n - q + 1 partially-honest individuals in a society and that no participant has a veto-power.

Suggested Citation

  • Lombardi, Michele & Yoshihara, Naoki, 2016. "Partially-honest Nash Implementation with Non-connected Honesty Standards," Discussion Paper Series 633, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hit:hituec:633
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    File URL: http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/27725/1/DP633.pdf
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    References listed on IDEAS

    as
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    2. Dutta, Bhaskar & Sen, Arunava, 2012. "Nash implementation with partially honest individuals," Games and Economic Behavior, Elsevier, vol. 74(1), pages 154-169.
    3. Matsushima, Hitoshi, 2008. "Role of honesty in full implementation," Journal of Economic Theory, Elsevier, vol. 139(1), pages 353-359, March.
    4. Matsushima, Hitoshi, 1988. "A new approach to the implementation problem," Journal of Economic Theory, Elsevier, vol. 45(1), pages 128-144, June.
    5. Kalai, Ehud & Ledyard, John O., 1998. "Repeated Implementation," Journal of Economic Theory, Elsevier, vol. 83(2), pages 308-317, December.
    6. Eric Maskin, 1999. "Nash Equilibrium and Welfare Optimality," Review of Economic Studies, Oxford University Press, vol. 66(1), pages 23-38.
    7. Michele Lombardi & Naoki Yoshihara, 2013. "A full characterization of nash implementation with strategy space reduction," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 54(1), pages 131-151, September.
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    9. Jackson, Matthew O, 1991. "Bayesian Implementation," Econometrica, Econometric Society, vol. 59(2), pages 461-477, March.
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    11. Lombardi, Michele & Yoshihara, Naoki, 2014. "Natural Implementation with Partially-honest Agents in Economic Environments with Free-disposal," Discussion Paper Series 616, Institute of Economic Research, Hitotsubashi University.
    12. Kartik, Navin & Tercieux, Olivier, 2012. "Implementation with evidence," Theoretical Economics, Econometric Society, vol. 7(2), May.
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    More about this item

    Keywords

    Nash implementation; partial-honesty; non-connected honesty standards; independent domain; q-mechanisms;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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