A new necessary condition for implementation in iteratively undominated strategies

• Main Authors: KUNIMOTO, Takashi, SERRANO, Roberto
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2011
• Subjects: Mechanism design; Exact and approximate implementation; Iteratively undominated strategies; Restricted deception-proofness; Incentive compatibility; Measurability; Economic Theory
• Online Access: https://ink.library.smu.edu.sg/soe_research/2004; https://ink.library.smu.edu.sg/context/soe_research/article/3003/viewcontent/NewNecessaryConditionIteratively_2011_JET.pdf
• Institution: Singapore Management University

We uncover a new necessary condition for implementation in iteratively undominated strategies by mechanisms that satisfy the “best element property” where for each agent, there exists a strategy profile that gives him the highest payoff in the mechanism. This class includes finite and regular mechanisms. We conclude that either the quasilinearity-like assumptions of available sufficiency results cannot be completely dispensed with or some mechanisms that do not satisfy the best element property must be employed. We term the condition “restricted deception-proofness.” It requires that, in environments with identical preferences, the social choice function be immune to all deceptions, making it then stronger than incentive compatibility. In some environments the conditions for (exact or approximate) implementation by mechanisms satisfying the best element property are more restrictive than previously thought.