Are simple mechanisms optimal when agents are unsophisticated?

• Main Authors: LI, Jiangtao, DWORCZAK, Piotr
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2022
• Subjects: Simple mechanisms; complex mechanisms; robust mechanism design; dominant-strategy mechanisms; obviously strategy-proof mechanisms; strongly obviouslystrategy-proof mechanisms; Economic Theory
• Online Access: https://ink.library.smu.edu.sg/soe_research/2547; https://ink.library.smu.edu.sg/context/soe_research/article/3546/viewcontent/SimpleOptimal__1_.pdf
• Institution: Singapore Management University

We study the design of mechanisms involving agents that have limited strategic sophistication. We define a mechanism to be simple if—given the assumed level of strategic sophistication—agents can determine their optimal strategy. We examine whether it is optimal for the mechanism designer who faces...