Implementation with near-complete information

K.-S. Chung, J.C. Ely

    Research output: Contribution to journalArticlepeer-review

    25 Citations (Scopus)

    Abstract

    Many refinements of Nash equilibrium yield solution correspondences that do not have closed graph in the space of payoffs or information. This has significance for implementation theory, especially under complete information. If a planner is concerned that all equilibria of his mechanism yield a desired outcome, and entertains the possibility that players may have even the slightest uncertainty about payoffs, then the planner should insist on a solution concept with closed graph. We show that this requirement entails substantial restrictions on the set of implementable social choice rules. In particular, when preferences are strict (or more generally, hedonic), while almost any social choice function can be implemented in undominated Nash equilibrium, only monotonic social choice functions can be implemented in the closure of the undominated Nash correspondence.
    Original languageEnglish
    Pages (from-to)857-871
    Number of pages15
    JournalEconometrica
    Volume71
    Issue number3
    DOIs
    Publication statusPublished - May 2003

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