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On the equivalence of bayesian and dominant strategy implementation


Gershkov, Alex; Goeree, Jacob K; Kushnir, Alexey; Moldovanu, Benny; Shi, Xianwen (2013). On the equivalence of bayesian and dominant strategy implementation. Econometrica, 81(1):197-220.

Abstract

We consider a standard social choice environment with linear utilities and independent, one-dimensional, private types. We prove that for any Bayesian incentive compatible mechanism there exists an equivalent dominant strategy incentive compatible mechanism that delivers the same interim expected utilities for all agents and the same ex ante expected social surplus. The short proof is based on an extension of an elegant result due to Gutmann et al. (Annals of Probability, 1991). We also show that the equivalence between Bayesian and dominant strategy implementation generally breaks down when the main assumptions underlying the social choice model are relaxed, or when the equivalence concept is strengthened to apply to interim expected allocations.

Abstract

We consider a standard social choice environment with linear utilities and independent, one-dimensional, private types. We prove that for any Bayesian incentive compatible mechanism there exists an equivalent dominant strategy incentive compatible mechanism that delivers the same interim expected utilities for all agents and the same ex ante expected social surplus. The short proof is based on an extension of an elegant result due to Gutmann et al. (Annals of Probability, 1991). We also show that the equivalence between Bayesian and dominant strategy implementation generally breaks down when the main assumptions underlying the social choice model are relaxed, or when the equivalence concept is strengthened to apply to interim expected allocations.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Language:English
Date:2013
Deposited On:06 Nov 2012 15:03
Last Modified:05 Apr 2016 16:03
Publisher:Wiley-Blackwell
ISSN:0012-9682
Free access at:Publisher DOI. An embargo period may apply.
Publisher DOI:https://doi.org/10.3982/ECTA10592
Related URLs:http://www.econ.uzh.ch/wp.html
http://www.zora.uzh.ch/51525/

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