Implementation with Evidence

Navin Kartik and Olivier Tercieux ()
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Olivier Tercieux: PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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Abstract: We generalize the canonical problem of Nash implementation by allowing agents to voluntarily provide discriminatory signals, i.e., evidence. Evidence can either take the form of hard information or, more generally, have differential but nonprohibitive costs in different states. In such environments, social choice functions that are not Maskin-monotonic can be implemented. We formulate a more general property, evidence monotonicity, and show that this is a necessary condition for implementation. Evidence monotonicity is also sufficient for implementation in economic environments. In some settings, such as when agents have small preferences for honesty, any social choice function is evidence-monotonic. Additional characterizations are obtained for hard evidence. We discuss the relationship between the implementation problem where evidence provision is voluntary and a hypothetical problem where evidence can be chosen by the planner as part of an extended outcome space.

Keywords: Mechanism design; Costly signaling; Verifiable information; Nash implementation (search for similar items in EconPapers)
Date: 2012-05
Note: View the original document on HAL open archive server: https://pjse.hal.science/halshs-00754592v1
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Citations: View citations in EconPapers (74)

Published in Theoretical Economics, 2012, 72 (2), pp.323-355. ⟨10.3982/TE723⟩

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Journal Article: Implementation with evidence (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:pseptp:halshs-00754592

DOI: 10.3982/TE723

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