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On the Equivalence of Bayesian and Dominant Strategy Implementation

  • Alex Gershkov
  • Jacob Goeree
  • Alexey Kushnir
  • Benny Moldovanu
  • Xianwen Shi

We consider a standard social choice environment with linear utilities and independent, one-dimensional, private types. We prove that for any Bayesian incentive compatible mechanism there exists an equivalent dominant strategy incentive compatible mechanism that delivers the same interim expected utilities for all agents and the same ex ante expected social surplus. The short proof is based on an extension of an elegant result due to Gutmann et al. (Annals of Probability, 1991). We also show that the equivalence between Bayesian and dominant strategy implementation generally breaks down when the main assumptions underlying the social choice model are relaxed, or when the equivalence concept is strengthened to apply to interim expected allocations.

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File URL: https://www.economics.utoronto.ca/public/workingPapers/tecipa-445.pdf
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Paper provided by University of Toronto, Department of Economics in its series Working Papers with number tecipa-445.

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Length: Unknown pages
Date of creation: 16 Feb 2012
Date of revision:
Handle: RePEc:tor:tecipa:tecipa-445
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  1. Muller, Rudolf & Perea, Andres & Wolf, Sascha, 2007. "Weak monotonicity and Bayes-Nash incentive compatibility," Games and Economic Behavior, Elsevier, vol. 61(2), pages 344-358, November.
  2. Dirk Bergemann & Stephen Morris, 2003. "Robust Mechanism Design," Cowles Foundation Discussion Papers 1421, Cowles Foundation for Research in Economics, Yale University.
  3. Jacob K. Goeree & Alexey Kushnir, 2011. "On the equivalence of Bayesian and dominant strategy implementation in a general class of social choice problems," ECON - Working Papers 021, Department of Economics - University of Zurich.
  4. Hernando-Veciana, Ángel & Michelucci, Fabio, 2011. "Second best efficiency and the English auction," Games and Economic Behavior, Elsevier, vol. 73(2), pages 496-506.
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