Robust Mechanism Design

Dirk Bergemann and Stephen Morris

Chapter 2 in Robust Mechanism Design:The Role of Private Information and Higher Order Beliefs, 2012, pp 49-96 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractThe mechanism design literature assumes too much common knowledge of the environment among the players and planner. We relax this assumption by studying mechanism design on richer type spaces.We ask when ex post implementation is equivalent to interim (or Bayesian) implementation for all possible type spaces. The equivalence holds in the case of separable environments; examples of separable environments arise (1) when the planner is implementing a social choice function (not correspondence) and (2) in a quasilinear environment with no restrictions on transfers. The equivalence fails in general, including in some quasilinear environments with budget balance.In private value environments, ex post implementation is equivalent to dominant strategies implementation. The private value versions of our results offer new insights into the relationship between dominant strategy implementation and Bayesian implementation.

Keywords: Mechanism Design; Game Theory; Auction Theory; Implementation; Private Information; First and Higher-Order Belief; BayesNash Equilibrium; Ex Post Equilibrium; Rationalizability; Vickrey-Clarke-Groves Mechanisms; Private Value; Interdependent Value; Common Value; Belief-Free Mechanisms (search for similar items in EconPapers)
JEL-codes: C70 D0 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (26)

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Related works:
Journal Article: Robust Mechanism Design (2005)
Working Paper: Robust Mechanism Design (2005)
Working Paper: Robust Mechanism Design (2004)
Working Paper: Robust Mechanism Design (2004)
Working Paper: Robust Mechanism Design (2003)
Working Paper: Robust Mechanism Design (2003)
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