Getting Dynamic Implementation to Work

Yi-Chun Chen

doi:10.1086/721153

Getting Dynamic Implementation to Work

2023-02-01

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DOI：10.1086/721153

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Abstract

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We develop a new class of two-stage mechanisms, which fully implement any social choice function under initial rationalizability in complete information environments. We show theoretically that our simultaneous report (SR) mechanisms are robust to small amounts of incomplete information about the state of nature. We also highlight the robustness of the mechanisms to a wide variety of reasoning processes and behavioral assumptions. We show experimentally that an SR mechanism performs well in inducing truth telling in both complete and incomplete information environments and that it can induce efficient investment in a two-sided holdup problem with ex ante investment.

Keywords:

SUBGAME-PERFECT IMPLEMENTATION

PUBLIC-GOODS

VIRTUAL IMPLEMENTATION

NASH EQUILIBRIUM

MECHANISM DESIGN

INFORMATION

RENEGOTIATION

RATIONALITY

INVESTMENTS

ROBUSTNESS

Getting Dynamic Implementation to Work

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