A Revelation Principle for Dominant Strategy Implementation

Jesse Schwartz () and Quan Wen ()
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Jesse Schwartz: Department of Economics, Finance and Quantitative Analysis, Kennesaw State University

No 819, Vanderbilt University Department of Economics Working Papers from Vanderbilt University Department of Economics

Abstract: We introduce a perfect price discriminating (PPD) mechanism for allocation problems with private information. A PPD mechanism treats a seller, for example, as a perfect price discriminating monopolist who faces a price schedule that does not depend on her report. In any PPD mechanism, every player has a dominant strategy to truthfully report her private information. We establish a revelation principle for dominant strategy implementation: any outcome that can be dominant strategy implemented can also be dominant strategy implemented using a PPD mechanism. We apply this principle to derive the optimal, budget-balanced, dominant strategy mechanisms for public good provision and bilateral bargaining.

Keywords: Dominant strategy implementation; Vickrey-Clarke-Groves mechanisms; public good provision; bilateral bargaining (search for similar items in EconPapers)
JEL-codes: C72 C78 D44 D82 H41 (search for similar items in EconPapers)
Date: 2008-10
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Persistent link: https://EconPapers.repec.org/RePEc:van:wpaper:0819

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