Secure Implementation: Strategy-Proof Mechanisms Reconsidered
Abstract
Strategy-proofness, requiring that truth-telling is a dominant strategy, is a standard concept in social choice theory. However, the concept of strategy-proofness has serious drawbacks. First, announcing one's true preference may not be a unique dominant strategy, and using the wrong dominant strategy may lead to the wrong outcome. Second, almost all strategy-proof mechanisms have a continuum of Nash equilibria, and most of which produce the wrong outcome. Third, experimental evidence shows that most of the strategy-proof mechanisms do not work well. We argue that a possible solution to this dilemma is to require double implementation in Nash equilibrium and in dominant strategies, which we call secure implementation. We characterize environments where secure implementation is possible, and compare it with dominant strategy implementation. An interesting example of secure implementation is a Groves mechanism when preferences are single-peaked.
Additional Information
Revised version. Original dated to June 1998. Research was partially supported by the Grant in Aid for Scientific Research 08453001 of the Ministry of Education, Science and Culture in Japan, the Japan Securities Scholarship Foundation, and the Abe Fellowship. We thank Salvador Barberà, Ken Binmore, Shinji Ohseto, and Thomas Palfrey for useful comments. 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.Attached Files
Submitted - sswp1174.pdf
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Additional details
- Eprint ID
- 79644
- Resolver ID
- CaltechAUTHORS:20170731-164437007
- 08453001
- Ministry of Education, Culture, Sports, Science and Technology (MEXT)
- Japan Securities Scholarship Foundation
- Abe Fellowship
- Created
-
2017-08-01Created from EPrint's datestamp field
- Updated
-
2019-10-03Created from EPrint's last_modified field
- Caltech groups
- Social Science Working Papers
- Series Name
- Social Science Working Paper
- Series Volume or Issue Number
- 1174