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On the equivalence between Bayesian and dominant strategy implementation: the case of correlated types


Kushnir, Alexey (2013). On the equivalence between Bayesian and dominant strategy implementation: the case of correlated types. Working paper series / Department of Economics 129, University of Zurich.

Abstract

We consider general social choice environments with private values and correlated types. Each agent's matrix of conditional probabilities satisfies the full rank condition. We show that for any Bayesian incentive compatible mechanism there exists a dominant strategy incentive compatible mechanism that delivers the same interim expected utilities to all agents and generates at least the same social surplus. In addition, if there is a social alternative that is inferior to the other alternatives for all agents the dominant strategy incentive compatible mechanism matches exactly the social surplus. These results extend to environments with interdependent values satisfying the single crossing condition.

We consider general social choice environments with private values and correlated types. Each agent's matrix of conditional probabilities satisfies the full rank condition. We show that for any Bayesian incentive compatible mechanism there exists a dominant strategy incentive compatible mechanism that delivers the same interim expected utilities to all agents and generates at least the same social surplus. In addition, if there is a social alternative that is inferior to the other alternatives for all agents the dominant strategy incentive compatible mechanism matches exactly the social surplus. These results extend to environments with interdependent values satisfying the single crossing condition.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:D82
Uncontrolled Keywords:Mechanism design, Bayesian implementation, dominant strategy implementation, full surplus extraction, correlation
Language:English
Date:August 2013
Deposited On:14 Aug 2013 13:37
Last Modified:05 Apr 2016 16:54
Series Name:Working paper series / Department of Economics
Number of Pages:9
ISSN:1664-7041
Official URL:http://www.econ.uzh.ch/static/wp/econwp129.pdf
Related URLs:http://www.econ.uzh.ch/static/workingpapers.php
Permanent URL: https://doi.org/10.5167/uzh-79952

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