Participation Security and Elementary Mechanisms

Benjamin Brooks () and Songzi Du ()
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Benjamin Brooks: Department of Economics, University of Chicago
Songzi Du: Department of Economics, University of California San Diego

No 2026-126, Working Papers from Becker Friedman Institute for Research In Economics

Abstract: A mechanism is participation secure if each agent has an action that guarantees them a payoff better than their outside option, no matter how other agents behave and no matter how uncertainty about preferences is resolved. Participation security implies that every agent’s interim payoff exceeds their outside option, in every information structure and equilibrium. The converse is true if the mechanism is elementary: Every action is the unique best response for some type in some information structure and equilibrium. Elementary mechanisms are shown to be a sufficient class for maximizing the welfare guarantee. Hence, for maximizing the guarantee, participation security is equivalent to interim participation in all information structures and equilibria.

Keywords: Mechanism design; information design; dual reduction; max-min; Bayes correlated equilibrium; robustness; participation security; individual rationality. (search for similar items in EconPapers)
JEL-codes: C72 D44 D82 D83 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2026-09-14
New Economics Papers: this item is included in nep-des, nep-gth and nep-mic
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