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On the Equivalence of Bayesian and Dominant Strategy Implementation

Alex Gershkov, Jacob Goeree (), Alexey Kushnir (), Benny Moldovanu () and Xianwen Shi

Working Papers from University of Toronto, Department of Economics

Abstract: We consider a standard social choice environment with linear utilities and independent, one-dimensional, private types. We prove that for any Bayesian incentive compatible mechanism there exists an equivalent dominant strategy incentive compatible mechanism that delivers the same interim expected utilities for all agents and the same ex ante expected social surplus. The short proof is based on an extension of an elegant result due to Gutmann et al. (Annals of Probability, 1991). We also show that the equivalence between Bayesian and dominant strategy implementation generally breaks down when the main assumptions underlying the social choice model are relaxed, or when the equivalence concept is strengthened to apply to interim expected allocations.

Keywords: Bayesian Implementation; Dominant Strategy Implementation; Equivalence (search for similar items in EconPapers)
JEL-codes: D82 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cta, nep-gth and nep-mic
Date: 2012-02-16
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Journal Article: On the Equivalence of Bayesian and Dominant Strategy Implementation (2013) Downloads
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