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Natural implementation with partially honest agents in economic environments

Listed author(s):
  • Lombardi, Michele
  • Yoshihara, Naoki

In this paper, we introduce the weak and the strong notions of partially honest agents (Dutta and Sen, 2012), and then study implementation by natural price-quantity mechanisms (Saijo et al., 1996, 1999) in pure exchange economies with three or more agents in which pure-consequentialistically rational agents and partially honest agents coexist. Firstly, assuming that there exists at least one partially honest agent in either the weak notion or the strong notion, the class of efficient social choice correspondences which are Nash-implementable by such mechanisms is characterized. Secondly, the (unconstrained) Walrasian correspondence is shown to be implementable by such a mechanism when there is at least one partially honest agent of the strong type, which may provide a behavioral foundation for decentralized implementation of the Walrasian equilibrium. Finally, in this set-up, the effects of honesty on the implementation of more equitable Pareto optimal allocations can be viewed as negligible.

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File URL: https://mpra.ub.uni-muenchen.de/48294/1/MPRA_paper_48294.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 48294.

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Date of creation: Jul 2013
Handle: RePEc:pra:mprapa:48294
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  2. Tian, Guoqiang, 2000. "Incentive Mechanism Design for Production Economies with Both Private and Public Ownerships," Games and Economic Behavior, Elsevier, vol. 33(2), pages 294-320, November.
  3. Dutta, Bhaskar & Sen, Arunava, 2012. "Nash implementation with partially honest individuals," Games and Economic Behavior, Elsevier, vol. 74(1), pages 154-169.
  4. Matsushima, Hitoshi, 2008. "Role of honesty in full implementation," Journal of Economic Theory, Elsevier, vol. 139(1), pages 353-359, March.
  5. 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.
  6. 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.
  7. Lombardi Michele & Yoshihara Naoki, 2012. "Natural implementation with partially hones agents," Research Memorandum 005, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  8. Eric Maskin, 1999. "Nash Equilibrium and Welfare Optimality," Review of Economic Studies, Oxford University Press, vol. 66(1), pages 23-38.
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  10. Kfir Eliaz, 2002. "Fault Tolerant Implementation," Review of Economic Studies, Oxford University Press, vol. 69(3), pages 589-610.
  11. Schmeidler, David, 1980. "Walrasian Analysis via Strategic Outcome Functions," Econometrica, Econometric Society, vol. 48(7), pages 1585-1593, November.
  12. 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.
  13. Luis Corchón & Carmen Herrero, 2004. "A decent proposal," Spanish Economic Review, Springer;Spanish Economic Association, vol. 6(2), pages 107-125, 07.
  14. 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.
  15. Kartik, Navin & Tercieux, Olivier, 2012. "Implementation with evidence," Theoretical Economics, Econometric Society, vol. 7(2), May.
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  17. Matsushima, Hitoshi, 2008. "Behavioral aspects of implementation theory," Economics Letters, Elsevier, vol. 100(1), pages 161-164, July.
  18. L. Hurwicz, 1979. "Outcome Functions Yielding Walrasian and Lindahl Allocations at Nash Equilibrium Points," Review of Economic Studies, Oxford University Press, vol. 46(2), pages 217-225.
  19. Bhaskar Dutta & Arunava Sen, 1991. "A Necessary and Sufficient Condition for Two-Person Nash Implementation," Review of Economic Studies, Oxford University Press, vol. 58(1), pages 121-128.
  20. 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.
  21. Lombardi, Michele & Yoshihara, Naoki, 2011. "Partially-honest Nash implementation: Characterization results," Discussion Paper Series 555, Institute of Economic Research, Hitotsubashi University.
  22. Samuel Bowles & Herbert Gintis, 2000. "Walrasian Economics in Retrospect," The Quarterly Journal of Economics, Oxford University Press, vol. 115(4), pages 1411-1439.
  23. William Thomson, 1984. "The Manipulability of Resource Allocation Mechanisms," Review of Economic Studies, Oxford University Press, vol. 51(3), pages 447-460.
  24. Lombardi, Michele & Yoshihara, Naoki, 2011. "Partially Honest Nash Implementation: A Full Characterization," MPRA Paper 48234, University Library of Munich, Germany, revised 11 Jul 2013.
  25. Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall.
  26. Moore, John & Repullo, Rafael, 1990. "Nash Implementation: A Full Characterization," Econometrica, Econometric Society, vol. 58(5), pages 1083-1099, September.
  27. 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.
  28. Jon Elster, 1998. "Emotions and Economic Theory," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 47-74, March.
  29. Andrew Postlewaite & David Wettstein, 1989. "Feasible and Continuous Implementation," Review of Economic Studies, Oxford University Press, vol. 56(4), pages 603-611.
  30. Otani, Yoshihiko & Sicilian, Joseph, 1982. "Equilibrium allocations of Walrasian preference games," Journal of Economic Theory, Elsevier, vol. 27(1), pages 47-68, June.
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