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Published November 2006 | public
Journal Article

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, Sjöström and Yamato [Saijo, T., Sjöström, T., Yamato, T., 2003. Secure implementation: Strategy-proof mechanisms reconsidered. Working paper 4-03-1. Department of Economics, Pennsylvania State University] argue that this concept has serious drawbacks. In particular, many strategyproof mechanisms have a continuum of Nash equilibria, including equilibria other than dominant strategy 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. 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

© 2006 Elsevier Inc. Received 24 November 2003; Available online 3 February 2006. Research was partially supported by the Grant in Aid for Scientific Research 15310023 of the Ministry of Education, Science and Culture in Japan, a Tokyo Center for Economic Research Grant, a Japan Economic Research Foundation Grant, and a University Faculty Scholar award at Purdue University. We thank anonymous referees and an associate editor for their useful comments. Formerly SSWP 1165.

Additional details

Created:
August 19, 2023
Modified:
October 17, 2023