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Natural implementation with partially hones agents

  • Lombardi Michele
  • Yoshihara Naoki

    (METEOR)

The paper proposes necessary and sufficient conditions for the natural implementation of(efficient) social choice correspondences (SCCs) in pure finite exchange economies when some ofthe agents are partially honest. A partially honest agent is an agent who strictly prefers to tellthe truth when lying has no better material consequences for her. Firstly, it is shown that ifthere is even one partially honest agent in the economy (and the planner does not know heridentity), then any SCC is Nash implementable by a natural price-allocation mechanism. Secondly,and in sharp contrast with the results of conventional models of natural implementation, it isshown that the equivalence relationship between natural price-allocation mechanisms and naturalprice-quantity² mechanisms no longer holds. Finally, and even more strikingly, the paper reportsthat the class of implementable SCCs by natural price-quantity mechanisms is significantly enlarged.

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File URL: http://digitalarchive.maastrichtuniversity.nl/fedora/objects/guid:1a578c7b-67bd-4e90-bcf3-669a3f0aca46/datastreams/ASSET1/content
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Paper provided by Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR) in its series Research Memorandum with number 005.

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Date of creation: 2012
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Handle: RePEc:unm:umamet:2012005
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  1. Maskin, Eric, 1999. "Nash Equilibrium and Welfare Optimality," Review of Economic Studies, Wiley Blackwell, vol. 66(1), pages 23-38, January.
  2. Jon Elster, 1998. "Emotions and Economic Theory," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 47-74, March.
  3. 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.
  4. Roberto Serrano & Antonio Cabrales, 2007. "Implementation in Adaptive Better-Response Dynamics," Working Papers 2007-10, Brown University, Department of Economics.
  5. Dutta, Bhaskar & Sen, Arunava, 2012. "Nash implementation with partially honest individuals," Games and Economic Behavior, Elsevier, vol. 74(1), pages 154-169.
  6. Kreps, David M, 1997. "Intrinsic Motivation and Extrinsic Incentives," American Economic Review, American Economic Association, vol. 87(2), pages 359-64, May.
  7. Amartya Sen, 1996. "Maximization and the Act of Choice," Harvard Institute of Economic Research Working Papers 1766, Harvard - Institute of Economic Research.
  8. Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall.
  9. Lombardi Michele & Yoshihara Naoki, 2010. "A Full Characterization of Nash Implementation with Strategy Space Reduction," Research Memorandum 023, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  10. Cabrales, Antonio & Serrano, Roberto, 2011. "Implementation in adaptive better-response dynamics: Towards a general theory of bounded rationality in mechanisms," Games and Economic Behavior, Elsevier, vol. 73(2), pages 360-374.
  11. Tatsuyoshi Saijo & Yoshikatsu Tatamitani & Takehiko Yamato, 1996. "Natural Implementation With A Simple Punishment," The Japanese Economic Review, Japanese Economic Association, vol. 47(2), pages 170-185, 06.
  12. Tatamitani, Yoshikatsu, 2001. "Implementation by self-relevant mechanisms," Journal of Mathematical Economics, Elsevier, vol. 35(3), pages 427-444, June.
  13. Luis Corchón & Carmen Herrero, 2004. "A decent proposal," Spanish Economic Review, Springer, vol. 6(2), pages 107-125, 07.
  14. 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.
  15. Suzumura, Kotaro & Xu, Yongsheng, 2000. "Characterizations of Consequentialism and Non-consequentialism," Discussion Paper 3, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
  16. Eliaz, K., 1999. "Fault Tolerant Implementation," Papers 21-99, Tel Aviv.
  17. Matthew O. Jackson, 2001. "A crash course in implementation theory," Social Choice and Welfare, Springer, vol. 18(4), pages 655-708.
  18. Samuel Bowles & Herbert Gintis, 2000. "Walrasian Economics In Retrospect," The Quarterly Journal of Economics, MIT Press, vol. 115(4), pages 1411-1439, November.
  19. Kfir Eliaz, 2002. "Fault Tolerant Implementation," Review of Economic Studies, Oxford University Press, vol. 69(3), pages 589-610.
  20. Lombardi, Michele & Yoshihara, Naoki, 2011. "Partially-honest Nash implementation: Characterization results," Discussion Paper Series 555, Institute of Economic Research, Hitotsubashi University.
  21. Bhaskar Dutta & Arunava Sen & Rajiv Vohra, 1994. "Nash implementation through elementary mechanisms in economic environments," Review of Economic Design, Springer, vol. 1(1), pages 173-203, December.
  22. 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).
  23. 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.
  24. 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.
  25. Kartik, Navin & Tercieux, Olivier, 2012. "Implementation with evidence," Theoretical Economics, Econometric Society, vol. 7(2), May.
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