Two examples to break through classical theorems on Nash implementation with two agents

Haoyang Wu ()

MPRA Paper from University Library of Munich, Germany

Abstract: [E. Maskin, \emph{Rev. Econom. Stud.} \textbf{66} (1999) 23-38] is a seminal paper in the field of mechanism design and implementation theory. [J. Moore and R. Repullo, \emph{Econometrica} \textbf{58} (1990) 1083-1099] and [B. Dutta and A. Sen, \emph{Rev. Econom. Stud.} \textbf{58} (1991) 121-128] are two fundamental papers on two-player Nash implementation. Recently, [H. Wu, http://arxiv.org/pdf/1004.5327v1 ] proposed a classical algorithm to break through Maskin's theorem for the case of many agents. In this paper, we will give two examples to break through the aforementioned results on two-agent Nash implementation by virtue of Wu's algorithm. There are two main contributions of this paper: 1) A two-player social choice rule (SCR) that satisfies Condition $\mu2$ cannot be Nash implemented if an additional Condition $\lambda'$ is satisfied. 2) A non-dictatorial two-player weakly pareto-optimal SCR is Nash implementable if Condition $\lambda'$ is satisfied. Although the former is negative for the economic society, the latter is just positive. Put in other words, some SCRs which are traditionally viewed as not be Nash implementable may be Nash implemented now.

Keywords: Quantum games; Mechanism design; Implementation theory; Nash implementation; Maskin monotonicity. (search for similar items in EconPapers)
JEL-codes: C72 D71 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-gth
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