Implementation and Social Influence
This paper incorporates social psychology into implementation theory. Real individuals care not only about their material benefits but also about their social influence in terms of obedience and conformity. Using a continuous time horizon, we demonstrate a method of manipulating the decision-making process, according to which, an uninformed principal utilizes her/his power of social influence to incentivize multiple informed agents to make honest announcements. Following this method, we show that with incentive compatibility, the principal can implement any alternative as she/he wishes as the unique Nash equilibrium outcome, even if her/his power is limited and no contractual devices are available.
|Date of creation:||Oct 2008|
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- Eric Maskin, 1999. "Nash Equilibrium and Welfare Optimality," Review of Economic Studies, Oxford University Press, vol. 66(1), pages 23-38.
- Matsushima, Hitoshi, 1988. "A new approach to the implementation problem," Journal of Economic Theory, Elsevier, vol. 45(1), pages 128-144, June.
- Abreu Dilip & Matsushima Hitoshi, 1994. "Exact Implementation," Journal of Economic Theory, Elsevier, vol. 64(1), pages 1-19, October.
- Kfir Eliaz, 2002. "Fault Tolerant Implementation," Review of Economic Studies, Oxford University Press, vol. 69(3), pages 589-610.
- Abreu, Dilip & Matsushima, Hitoshi, 1992. "Virtual Implementation in Iteratively Undominated Strategies: Complete Information," Econometrica, Econometric Society, vol. 60(5), pages 993-1008, September.
- 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.
- Matsushima, Hitoshi, 2008.
"Behavioral aspects of implementation theory,"
Elsevier, vol. 100(1), pages 161-164, July.
- Bernheim, B Douglas, 1994. "A Theory of Conformity," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 841-77, October.
- Hitoshi Matsushima, 2007.
"Role of Honesty in Full Implementation,"
CIRJE-F-518, CIRJE, Faculty of Economics, University of Tokyo.
- Martin J Osborne & Ariel Rubinstein, 2009.
"A Course in Game Theory,"
814577000000000225, UCLA Department of Economics.
- Uri Gneezy, 2005. "Deception: The Role of Consequences," American Economic Review, American Economic Association, vol. 95(1), pages 384-394, March.
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