The Role of the Common Prior in Robust Implementation

Dirk Bergemann () and Stephen Morris ()

No 1628, Cowles Foundation Discussion Papers from Cowles Foundation, Yale University

Abstract: We consider the role of the common prior for robust implementation in an environment with interdependent values. Specifically, we investigate a model of public good provision which allows for negative and positive informational externalities. In the corresponding direct mechanism, the agents' reporting strategies are strategic complements with negative informational externalities and strategic substitutes with positive informational externalities. We derive the necessary and sufficient conditions for robust implementation in common prior type spaces and contrast this with our earlier results without the common prior. In the case of strategic complements the necessary and sufficient conditions for robust implementation do not depend on the existence of a common prior. In contrast, with strategic substitutes, the implementation conditions are much weaker under the common prior assumption.

Keywords: Common prior; Correlated equilibrium; Ex post equilibrium; Mechanism design; Robust implementation; Rationalizability; Strategic complements; Strategic substitutes; Uniqueness (search for similar items in EconPapers)
JEL-codes: C79 D82 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cse and nep-gth
Date: Written
Note: CFP 1225.
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Published in Journal of the European Economic Association (April-May 2008), 6(2-3): 551-559

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Related works:
Working Paper: The Role of the Common Prior in Robust Implementation (2007)
Journal Article: The Role of the Common Prior in Robust Implementation (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:cwl:cwldpp:1628

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