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Natural implementation with partially honest agents in economic environments

  • 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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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
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Handle: RePEc:pra:mprapa:48294
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  1. Dutta, Bhaskar & Sen, Arunava, 1991. "A Necessary and Sufficient Condition for Two-Person Nash Implementation," Review of Economic Studies, Wiley Blackwell, vol. 58(1), pages 121-28, January.
  2. Matsushima, Hitoshi, 2008. "Role of honesty in full implementation," Journal of Economic Theory, Elsevier, vol. 139(1), pages 353-359, March.
  3. Matthew 0. Jackson, 1989. "Implementation in Undominated Strategies - A Look at Bounded Mechanisms," Discussion Papers 833, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  4. Lombardi, Michele & Yoshihara, Naoki, 2013. "Partially Honest Nash Implementation: A Full Characterization," Discussion Paper Series 590, Institute of Economic Research, Hitotsubashi University.
  5. Sen, A., 1996. "Maximisation and the Act of Choice," Papers 270, Banca Italia - Servizio di Studi.
  6. 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.
  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. Samuel Bowles & Herbert Gintis, 2000. "Walrasian Economics in Retrospect," UMASS Amherst Economics Working Papers 2000-04, University of Massachusetts Amherst, Department of Economics.
  9. Matsushima, Hitoshi, 2008. "Behavioral aspects of implementation theory," Economics Letters, Elsevier, vol. 100(1), pages 161-164, July.
  10. Kotaro Suzumura & Yongsheng Xu, 1999. "Characterizations of Consenquentialism and Non-consequentialism," Discussion Paper Series a365, Institute of Economic Research, Hitotsubashi University.
  11. Moore, John & Repullo, Rafael, 1990. "Nash Implementation: A Full Characterization," Econometrica, Econometric Society, vol. 58(5), pages 1083-99, September.
  12. Dutta, Bhaskar & Sen, Arunava, 2012. "Nash implementation with partially honest individuals," Games and Economic Behavior, Elsevier, vol. 74(1), pages 154-169.
  13. Eliaz, K., 1999. "Fault Tolerant Implementation," Papers 21-99, Tel Aviv.
  14. Schmeidler, David, 1980. "Walrasian Analysis via Strategic Outcome Functions," Econometrica, Econometric Society, vol. 48(7), pages 1585-93, November.
  15. Kreps, David M, 1997. "Intrinsic Motivation and Extrinsic Incentives," American Economic Review, American Economic Association, vol. 87(2), pages 359-64, May.
  16. Eric Maskin, 1998. "Nash Equilibrium and Welfare Optimality," Harvard Institute of Economic Research Working Papers 1829, Harvard - Institute of Economic Research.
  17. 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.
  18. 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.
  19. 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.
  20. Lombardi, Michele & Yoshihara, Naoki, 2011. "Partially-honest Nash implementation: Characterization results," CCES Discussion Paper Series 43, Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University.
  21. Kfir Eliaz, 2002. "Fault Tolerant Implementation," Review of Economic Studies, Oxford University Press, vol. 69(3), pages 589-610.
  22. Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall.
  23. Lombardi, Michele & Yoshihara, Naoki, 2011. "A Full Characterization of Nash Implementation with Strategy Space Reduction," Discussion Paper Series a548, Institute of Economic Research, Hitotsubashi University.
  24. Luis Corchón & Carmen Herrero, 2004. "A decent proposal," Spanish Economic Review, Springer, vol. 6(2), pages 107-125, 07.
  25. Otani, Yoshihiko & Sicilian, Joseph, 1982. "Equilibrium allocations of Walrasian preference games," Journal of Economic Theory, Elsevier, vol. 27(1), pages 47-68, June.
  26. Kartik, Navin & Tercieux, Olivier, 2012. "Implementation with evidence," Theoretical Economics, Econometric Society, vol. 7(2), May.
  27. Thomson, William, 1984. "The Manipulability of Resource Allocation Mechanisms," Review of Economic Studies, Wiley Blackwell, vol. 51(3), pages 447-60, July.
  28. Hurwicz, L, 1979. "Outcome Functions Yielding Walrasian and Lindahl Allocations at Nash Equilibrium Points," Review of Economic Studies, Wiley Blackwell, vol. 46(2), pages 217-25, April.
  29. Jon Elster, 1998. "Emotions and Economic Theory," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 47-74, March.
  30. Postlewaite, Andrew & Wettstein, David, 1989. "Feasible and Continuous Implementation," Review of Economic Studies, Wiley Blackwell, vol. 56(4), pages 603-11, October.
  31. 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.
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