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Implementation theory

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has the property that honestly reporting the truth is always a dominant strategy for each agent." However, the payments to agents become large, sacrificing budget neutrality to incentive compatibility.
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In a game where multiple agents are to report their preferences (or their type), it may be in the best interest of some agents to lie about their preferences. This may improve their
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mechanism that attains ("implements") this function. There are several degrees of implementability, corresponding to the different degrees of incentive-compatibility, including:
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showed that if preferences are restricted to the case of quasi-linear utility functions then the mechanism dominant strategy is dominant-strategy implementable. "A
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Vickrey, William. "Counterspeculation, Auctions, and Competitive Sealed Tenders." The Journal of Finance 16, no. 1 (1961): 8–37.
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Jackson, Matthew O. "A Crash Course in Implementation Theory." Social Choice and Welfare 18, no. 4 (2001): 655–708.
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Although largely theoretical, implementation theory may have profound implications on policy creation because some
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Palfrey, Thomas R. "Chapter 61 Implementation Theory." Handbook of Game Theory with Economic Applications, 2002.
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and choosing over a finite set of alternatives. In the case of producing and allocating public/private goods,
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if it is attainable by a mechanism which is dominant-strategy-incentive-compatible (also called
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See for a recent reference. In some textbooks, the entire field of mechanism design is called
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Maskin, Eric. "Implementation Theory." Handbook of Social Choice and Welfare, 2002.
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There are two general types of implementation problems: the economic problem of
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if it is attainable by a mechanism which is Bayesian-Nash-incentive-compatible.
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In his paper "Counterspeculation, Auctions, and Competitive Sealed Tenders",
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Martin J. Osborne & Ariel Rubinstein: A Course in Game Theory (1994).
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rules may be impossible to implement under specific game conditions.
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whose equilibrium outcomes implement a given set of
1350: 290: 25:mechanisms (or institutions) can be designed 297: 283: 304: 177: 175: 197: 195: 1351: 172: 113:, implementability is a property of a 278: 192: 160:Implementability (mechanism design) 102: 13: 346:First-player and second-player win 224:10.1111/j.1540-6261.1961.tb02789.x 23:concerned with whether a class of 14: 1370: 453:Coalition-proof Nash equilibrium 127:dominant-strategy implementable 463:Evolutionarily stable strategy 262: 237: 212: 1: 391:Simultaneous action selection 207:10.1016/S1574-0110(02)80009-1 187:10.1016/S1574-0005(02)03024-2 165: 1323:List of games in game theory 503:Quantal response equilibrium 493:Perfect Bayesian equilibrium 428:Bayes correlated equilibrium 117:. It means that there is an 7: 792:Optional prisoner's dilemma 523:Self-confirming equilibrium 153: 138:Bayesian-Nash implementable 10: 1375: 1257:Principal variation search 973:Aumann's agreement theorem 636:Strategy-stealing argument 548:Trembling hand equilibrium 478:Markov perfect equilibrium 473:Mertens-stable equilibrium 72:rule is dominant strategy 19:is an area of research in 1293:Combinatorial game theory 1280: 1239: 1021: 965: 952:Princess and monster game 747: 649: 556: 508:Quasi-perfect equilibrium 433:Bayesian Nash equilibrium 414: 313: 1308:Evolutionary game theory 1041:Antoine Augustin Cournot 927:Guess 2/3 of the average 724:Strictly determined game 518:Satisfaction equilibrium 336:Escalation of commitment 1313:Glossary of game theory 912:Stackelberg competition 538:Strong Nash equilibrium 57:are focused on finding 1338:Tragedy of the commons 1318:List of game theorists 1298:Confrontation analysis 1008:Sprague–Grundy theorem 528:Sequential equilibrium 448:Correlated equilibrium 115:social choice function 1111:Jean-François Mertens 249:10.1007/s003550100152 147:implementation theory 17:Implementation theory 1240:Search optimizations 1116:Jennifer Tour Chayes 1003:Revelation principle 998:Purification theorem 937:Nash bargaining game 902:Bertrand competition 887:El Farol Bar problem 852:Electronic mail game 817:Lewis signaling game 361:Hierarchy of beliefs 119:incentive-compatible 82:revelation mechanism 80:, if the associated 74:incentive compatible 1288:Bounded rationality 907:Cournot competition 857:Rock paper scissors 832:Battle of the sexes 822:Volunteer's dilemma 694:Perfect information 621:Dominant strategies 458:Epsilon-equilibrium 341:Extensive-form game 59:dominant strategies 1267:Paranoid algorithm 1247:Alpha–beta pruning 1126:John Maynard Smith 957:Rendezvous problem 797:Traveler's dilemma 787:Gift-exchange game 782:Prisoner's dilemma 699:Large Poisson game 666:Bargaining problem 571:Backward induction 543:Subgame perfection 498:Proper equilibrium 1346: 1345: 1252:Aspiration window 1221:Suzanne Scotchmer 1176:Oskar Morgenstern 1071:Donald B. Gillies 1013:Zermelo's theorem 942:Induction puzzles 897:Fair cake-cutting 872:Public goods game 802:Coordination game 676:Intransitive game 606:Forward induction 488:Pareto efficiency 468:Gibbs equilibrium 438:Berge equilibrium 386:Simultaneous game 55:solution concepts 1366: 1333:Topological game 1328:No-win situation 1226:Thomas Schelling 1206:Robert B. Wilson 1166:Merrill M. Flood 1136:John von Neumann 1046:Ariel Rubinstein 1031:Albert W. Tucker 882:War of attrition 842:Matching pennies 483:Nash equilibrium 406:Mechanism design 371:Normal-form game 326:Cooperative game 299: 292: 285: 276: 275: 269: 266: 260: 241: 235: 216: 210: 199: 190: 179: 110:mechanism design 103:Implementability 1374: 1373: 1369: 1368: 1367: 1365: 1364: 1363: 1349: 1348: 1347: 1342: 1276: 1262:max^n algorithm 1235: 1231:William Vickrey 1191:Reinhard Selten 1146:Kenneth Binmore 1061:David K. Levine 1056:Daniel Kahneman 1023: 1017: 993:Negamax theorem 983:Minimax theorem 961: 922:Diner's dilemma 777:All-pay auction 743: 729:Stochastic game 681:Mean-field game 652: 645: 616:Markov strategy 552: 418: 410: 381:Sequential game 366:Information set 351:Game complexity 321:Congestion game 309: 303: 273: 272: 267: 263: 242: 238: 217: 213: 200: 193: 180: 173: 168: 156: 105: 66:William Vickrey 12: 11: 5: 1372: 1362: 1361: 1344: 1343: 1341: 1340: 1335: 1330: 1325: 1320: 1315: 1310: 1305: 1300: 1295: 1290: 1284: 1282: 1278: 1277: 1275: 1274: 1269: 1264: 1259: 1254: 1249: 1243: 1241: 1237: 1236: 1234: 1233: 1228: 1223: 1218: 1213: 1208: 1203: 1198: 1196:Robert Axelrod 1193: 1188: 1183: 1178: 1173: 1171:Olga Bondareva 1168: 1163: 1161:Melvin Dresher 1158: 1153: 1151:Leonid Hurwicz 1148: 1143: 1138: 1133: 1128: 1123: 1118: 1113: 1108: 1103: 1098: 1093: 1088: 1086:Harold W. Kuhn 1083: 1078: 1076:Drew Fudenberg 1073: 1068: 1066:David M. Kreps 1063: 1058: 1053: 1051:Claude Shannon 1048: 1043: 1038: 1033: 1027: 1025: 1019: 1018: 1016: 1015: 1010: 1005: 1000: 995: 990: 988:Nash's theorem 985: 980: 975: 969: 967: 963: 962: 960: 959: 954: 949: 944: 939: 934: 929: 924: 919: 914: 909: 904: 899: 894: 889: 884: 879: 874: 869: 864: 859: 854: 849: 847:Ultimatum game 844: 839: 834: 829: 827:Dollar auction 824: 819: 814: 812:Centipede game 809: 804: 799: 794: 789: 784: 779: 774: 769: 767:Infinite chess 764: 759: 753: 751: 745: 744: 742: 741: 736: 734:Symmetric game 731: 726: 721: 719:Signaling game 716: 714:Screening game 711: 706: 704:Potential game 701: 696: 691: 683: 678: 673: 668: 663: 657: 655: 647: 646: 644: 643: 638: 633: 631:Mixed strategy 628: 623: 618: 613: 608: 603: 598: 593: 588: 583: 578: 573: 568: 562: 560: 554: 553: 551: 550: 545: 540: 535: 530: 525: 520: 515: 513:Risk dominance 510: 505: 500: 495: 490: 485: 480: 475: 470: 465: 460: 455: 450: 445: 440: 435: 430: 424: 422: 412: 411: 409: 408: 403: 398: 393: 388: 383: 378: 373: 368: 363: 358: 356:Graphical game 353: 348: 343: 338: 333: 328: 323: 317: 315: 311: 310: 302: 301: 294: 287: 279: 271: 270: 261: 236: 211: 191: 170: 169: 167: 164: 163: 162: 155: 152: 142: 141: 136:A function is 134: 125:A function is 104: 101: 78:strategy-proof 9: 6: 4: 3: 2: 1371: 1360: 1357: 1356: 1354: 1339: 1336: 1334: 1331: 1329: 1326: 1324: 1321: 1319: 1316: 1314: 1311: 1309: 1306: 1304: 1301: 1299: 1296: 1294: 1291: 1289: 1286: 1285: 1283: 1281:Miscellaneous 1279: 1273: 1270: 1268: 1265: 1263: 1260: 1258: 1255: 1253: 1250: 1248: 1245: 1244: 1242: 1238: 1232: 1229: 1227: 1224: 1222: 1219: 1217: 1216:Samuel Bowles 1214: 1212: 1211:Roger Myerson 1209: 1207: 1204: 1202: 1201:Robert Aumann 1199: 1197: 1194: 1192: 1189: 1187: 1184: 1182: 1179: 1177: 1174: 1172: 1169: 1167: 1164: 1162: 1159: 1157: 1156:Lloyd Shapley 1154: 1152: 1149: 1147: 1144: 1142: 1141:Kenneth Arrow 1139: 1137: 1134: 1132: 1129: 1127: 1124: 1122: 1121:John Harsanyi 1119: 1117: 1114: 1112: 1109: 1107: 1104: 1102: 1099: 1097: 1094: 1092: 1091:Herbert Simon 1089: 1087: 1084: 1082: 1079: 1077: 1074: 1072: 1069: 1067: 1064: 1062: 1059: 1057: 1054: 1052: 1049: 1047: 1044: 1042: 1039: 1037: 1034: 1032: 1029: 1028: 1026: 1020: 1014: 1011: 1009: 1006: 1004: 1001: 999: 996: 994: 991: 989: 986: 984: 981: 979: 976: 974: 971: 970: 968: 964: 958: 955: 953: 950: 948: 945: 943: 940: 938: 935: 933: 930: 928: 925: 923: 920: 918: 915: 913: 910: 908: 905: 903: 900: 898: 895: 893: 892:Fair division 890: 888: 885: 883: 880: 878: 875: 873: 870: 868: 867:Dictator game 865: 863: 860: 858: 855: 853: 850: 848: 845: 843: 840: 838: 835: 833: 830: 828: 825: 823: 820: 818: 815: 813: 810: 808: 805: 803: 800: 798: 795: 793: 790: 788: 785: 783: 780: 778: 775: 773: 770: 768: 765: 763: 760: 758: 755: 754: 752: 750: 746: 740: 739:Zero-sum game 737: 735: 732: 730: 727: 725: 722: 720: 717: 715: 712: 710: 709:Repeated game 707: 705: 702: 700: 697: 695: 692: 690: 688: 684: 682: 679: 677: 674: 672: 669: 667: 664: 662: 659: 658: 656: 654: 648: 642: 639: 637: 634: 632: 629: 627: 626:Pure strategy 624: 622: 619: 617: 614: 612: 609: 607: 604: 602: 599: 597: 594: 592: 591:De-escalation 589: 587: 584: 582: 579: 577: 574: 572: 569: 567: 564: 563: 561: 559: 555: 549: 546: 544: 541: 539: 536: 534: 533:Shapley value 531: 529: 526: 524: 521: 519: 516: 514: 511: 509: 506: 504: 501: 499: 496: 494: 491: 489: 486: 484: 481: 479: 476: 474: 471: 469: 466: 464: 461: 459: 456: 454: 451: 449: 446: 444: 441: 439: 436: 434: 431: 429: 426: 425: 423: 421: 417: 413: 407: 404: 402: 401:Succinct game 399: 397: 394: 392: 389: 387: 384: 382: 379: 377: 374: 372: 369: 367: 364: 362: 359: 357: 354: 352: 349: 347: 344: 342: 339: 337: 334: 332: 329: 327: 324: 322: 319: 318: 316: 312: 308: 300: 295: 293: 288: 286: 281: 280: 277: 265: 258: 254: 250: 246: 240: 233: 229: 225: 221: 215: 208: 204: 198: 196: 188: 184: 178: 176: 171: 161: 158: 157: 151: 149: 148: 139: 135: 132: 131:strategyproof 128: 124: 123: 122: 120: 116: 112: 111: 100: 98: 97:social choice 93: 91: 86: 83: 79: 75: 71: 70:social choice 67: 62: 60: 56: 52: 51:private goods 48: 45: 41: 36: 34: 30: 26: 22: 18: 1186:Peyton Young 1181:Paul Milgrom 1096:HervĂ© Moulin 1036:Amos Tversky 978:Folk theorem 689:-player game 686: 611:Grim trigger 264: 239: 214: 146: 145: 143: 137: 126: 108: 106: 94: 87: 63: 37: 16: 15: 1359:Game theory 1303:Coopetition 1106:Jean Tirole 1101:John Conway 1081:Eric Maskin 877:Blotto game 862:Pirate game 671:Global game 641:Tit for tat 576:Bid shading 566:Appeasement 416:Equilibrium 396:Solved game 331:Determinacy 314:Definitions 307:game theory 21:game theory 947:Trust game 932:Kuhn poker 601:Escalation 596:Deterrence 586:Cheap talk 558:Strategies 376:Preference 305:Topics of 166:References 44:allocating 35:criteria. 1131:John Nash 837:Stag hunt 581:Collusion 40:producing 31:goals or 29:normative 1353:Category 1272:Lazy SMP 966:Theorems 917:Deadlock 772:Checkers 653:of games 420:concepts 257:41106420 154:See also 1024:figures 807:Chicken 661:Auction 651:Classes 232:2977633 33:welfare 255:  230:  90:payoff 47:public 762:Chess 749:Games 253:JSTOR 228:JSTOR 76:, or 443:Core 49:and 42:and 1022:Key 245:doi 220:doi 203:doi 183:doi 107:In 1355:: 757:Go 251:. 226:. 194:^ 174:^ 150:. 133:). 61:. 687:n 298:e 291:t 284:v 259:. 247:: 234:. 222:: 209:. 205:: 189:. 185::

Index

game theory
mechanisms (or institutions) can be designed
normative
welfare
producing
allocating
public
private goods
solution concepts
dominant strategies
William Vickrey
social choice
incentive compatible
strategy-proof
revelation mechanism
payoff
social choice
mechanism design
social choice function
incentive-compatible
strategyproof
implementation theory
Implementability (mechanism design)


doi
10.1016/S1574-0005(02)03024-2


doi

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