Reinterpreting King Solomon's Problem: Malice and Mechanism Design

• Main Author: GUHA, Brishti
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2014
• Subjects: King Solomon's problem; Mechanism design; Malice; Elimination of dominated strategies; Behavioral Economics
• Online Access: https://ink.library.smu.edu.sg/soe_research/1527; https://ink.library.smu.edu.sg/context/soe_research/article/2526/viewcontent/ReinterpretingKingSolomonProblem_2014_JEBO.pdf
• Institution: Singapore Management University

I argue for an alternative interpretation of King Solomon's problem in terms of one of the two claimants being “malicious”. A “malicious” claimant places no intrinsic value on the object but derives utility from depriving the rival claimant. This new interpretation permits a simpler solution than those considered in the literature; I derive a mechanism that induces truthful revelation where the equilibrium involves a single round of elimination of weakly dominated strategies, and no monetary transfers. I consider extensions which allow for the malicious claimant to also place some low but positive intrinsic valuation on the object; I also discuss the possibility of two-sided malice, and provide examples of several real-life contexts to which the mechanism or its extensions are applicable.