Mechanism design with a restricted action space

Liad Blumrosen and Michal Feldman

Games and Economic Behavior, 2013, vol. 82, issue C, 424-443

Abstract: While traditional mechanism design typically assumes isomorphism between the type space of the players and their action space, behavioral, technical or regulatory factors can severely restrict the set of actions that are actually available to players. We study single-parameter mechanism-design problems in environments with restricted action spaces. In our first main result, we provide sufficient conditions under which the information-theoretically optimal solution can be implemented in equilibrium. Our second main result shows that for a wide family of social-choice rules the optimal mechanisms with k actions incur an expected loss of O(1k2) compared to the optimal mechanisms with unrestricted action space. We also fully characterize the optimal mechanisms in some simple environments and, finally, we apply our general results to signaling games, public-good models and project planning.

JEL-codes: D82 D83 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0899825613000481
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:82:y:2013:i:c:p:424-443

DOI: 10.1016/j.geb.2013.03.005

Access Statistics for this article

Games and Economic Behavior is currently edited by E. Kalai

More articles in Games and Economic Behavior from Elsevier
Bibliographic data for series maintained by Catherine Liu ().