Adaptive Dynamics and the Implementation Problem with Complete Information

Antonio Cabrales

ELSE working papers from ESRC Centre on Economics Learning and Social Evolution

Abstract: This paper studies the equilibrating process of several implementation mecha-nisms using naive adaptive dynamics. We show that the dynamics converge and are stable, for the canonical mechanism of implementation in Nash equilibrium. In this way we cast some doubt on the criticism of complexity commonly used against this mechanism. For mechanisms that use more refined equilibrium concepts, the dynamics converge but are not stable. Some papers in the literature on implemen-tation with refined equilibrium concepts have claimed that the mechanisms they propose are simple and implement everything (in contrast with the canoni-cal mechanism). The fact that some of these simple mechanisms have unstable equilibria suggests that these statements should be interpreted with some caution. Key Words: Implementation; Bounded Rationality; Evolutionary dynamics; Mechanisms.

JEL-codes: C72 D70 D78 (search for similar items in EconPapers)
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Citations: View citations in EconPapers (27)

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Related works:
Journal Article: Adaptive Dynamics and the Implementation Problem with Complete Information (1999)
Working Paper: Adaptive dynamics and the implementation problem with complete information (1996)
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Persistent link: https://EconPapers.repec.org/RePEc:els:esrcls:009

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