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Published August 1, 2017 | Submitted
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Secure Implementation Experiments: Do Strategy-proof Mechanisms Really Work?

Abstract

Strategy-proofness, requiring that truth-telling is a dominant strategy, is a standard concept used in social choice theory. Saijo, et al., (2003) argue that this concept has serious drawbacks. In particular, announcing one's true preference may not be a unique dominant strategy, and almost all strategy-proof mechanisms have a continuum of Nash equilibria. For only a subset of strategy-proof mechanisms do the set of Nash equilibria and the set of dominant strategy equilibria coincide. For example, this double coincidence occurs in the Groves mechanism when preferences are single-peaked. We report experiments using two strategy-proof mechanisms where one of them has a large number of Nash equilibria, but the other has a unique Nash equilibrium. We found clear differences in the rate of dominant strategy play between the two.

Additional Information

Research was partially supported by the Grant in Aid for Scientific Research 08453001 of the Ministry of Education, Science and Culture in Japan, the Tokyo Center for Economic Research Grant, and the Japan Economic Research Foundation Grant. Published as Cason, T N., Saijo, T., Sjöström, T., & Yamato, T. (2006). Secure implementation experiments: Do strategy-proof mechanisms really work?. Games and Economic Behavior, 57(2), 206-235.

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