Implementation in adaptive better-response dynamics

Antonio Cabrales and Roberto Serrano

No 2007-16, Working Papers from Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales

Abstract: We study the classic implementation problem under the behavioral assumption that agents myopically adjust their actions in the direction of better-responses within a given institution. We offer results both under complete and incomplete information. First, we show that a necessary condition for assymptotically stable implementation is a small variation of (Maskin) monotonicity, which we call quasimonotonicity. Under standard assumptions in economic environments, we also provide a mechanism for Nash implementation which has good dynamic properties if the rule is quasimonotonic. Thus, quasimonotonicity is both necessary and almost sufficient for assymptotically stable implementation. Under incomplete information, incentive compatibility is necessary for any kind of stable implementation in our sense, while Bayesian quasimonotonicity is necessary for assymptotically stable implementation. Both conditions are also essentially sufficient for assymptotically stable implementation. We then tighten the assumptions on preferences and mutation processes and provide mechanisms for stochastically stable implementation under more permissive conditions on social choice rules.

Keywords: implementation; bounded rationality; evolutionary dynamics; mechanisms (search for similar items in EconPapers)
JEL-codes: C72 D70 D78 (search for similar items in EconPapers)
Date: 2007-08-22
New Economics Papers: this item is included in nep-evo and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Games and Economic Behavior 73(2), November 2011: 360-374

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Related works:
Working Paper: Implementation in Adaptive Better-Response Dynamics (2007)
Working Paper: Implemetation in Adaptive Better-Response Dynamics (2007)
Working Paper: Implementation in adaptive better-response dynamics (2007)
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