Process Manipulation in Unique Implementation

Hitoshi Matsushima

No CIRJE-F-870, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: We incorporate social influence into implementation theory, and highlight the manner in which an informed agent feels guilty with regard to disobeying an uninformed principal's wishes. The degree of this feeling depends on the agent's expectation of others' behavioral modes. We demonstrate a method of process manipulation, through which the principal employs psychological tactics for incentivizing agents to announce information in keeping with his/her wishes. We indicate that with a version of incentive compatibility, the principal can implement any alternative that he/she wishes as the unique Nash equilibrium without employing any contractual devices. Each agent's psychological cost would be negligible.

Pages: 20 pages
Date: 2012-11
New Economics Papers: this item is included in nep-cta and nep-mic
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Journal Article: Process manipulation in unique implementation (2013)
Working Paper: Process Manipulation in Unique Implementation (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:tky:fseres:2012cf870

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