Robust Implementation in Direct Mechanisms

Dirk Bergemann and Stephen Morris

Chapter 4 in Robust Mechanism Design:The Role of Private Information and Higher Order Beliefs, 2012, pp 153-194 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractA social choice function is robustly implementable if there is a mechanism under which the process of iteratively eliminating strictly dominated messages leads to outcomes that agree with the social choice for all beliefs at every type profile. In an interdependent value environment with single crossing preferences, we identify a contraction property on the preferences which together with strict ex post incentive compatibility is sufficient to guarantee robust implementation in the direct mechanism. Strict ex post incentive compatibility and the contraction property are also necessary for robust implementation in any mechanism, including indirect ones.The contraction property requires that the interdependence is not too large. In a linear signal model, the contraction property is equivalent to an interdependence matrix having an eigenvalue less than one.

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 (1)

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Related works:
Journal Article: Robust Implementation in Direct Mechanisms (2009)
Working Paper: Robust Implementation in Direct Mechanisms (2009)
Working Paper: Robust Implementation in Direct Mechanisms (2009)
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