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Safe implementation
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PRE
AI
DOI：10.3982/TE5983.png)
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Abstract
En 中文
Implementation theory is concerned with the existence of mechanisms in which, at each state of the world, all equilibria result in outcomes that are within a given social choice correspondence (SCC). However, if agents make mistakes, if their preferences or the solution concept are misspecified, or if the designer is limited in what can be used as punishments, then it may be desirable to insist that also deviations result in acceptable outcomes. Safe implementation adds this extra requirement to standard implementation. Our primitives, therefore, also include an acceptability correspondence, which, like the SCC, maps states of the world to sets of allocations. When the underlying solution concept is Nash equilibrium, we identify necessary and sufficient conditions (namely, comonotonicity and safe no-veto) that restrict the joint behavior of the SCC and of the acceptability correspondence, and that generalize Maskin's (1999) conditions. In relevant economic applications, these conditions can be quite permissive, but in rich preference domains, safe implementation is impossible, regardless of the solution concept.
Keywords:
Comonotonicity
mechanism design
implementation
robustness
safe implementation
C72
D82
Journal
T
IF:
1.3
Papers:
31
Citations:
0