Implementation with near-complete information

Kim Sau Chung*, Jeffrey C. Ely

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

21 Scopus citations

Abstract

Many refinements of Nash equilibrium yield solution correspondences that do not have closed graph in the space of payoffs or information. This has significance for implementation theory, especially under complete information. If a planner is concerned that all equilibria of his mechanism yield a desired outcome, and entertains the possibility that players may have even the slightest uncertainty about payoffs, then the planner should insist on a solution concept with closed graph. We show that this requirement entails substantial restrictions on the set of implementable social choice rules. In particular, when preferences are strict (or more generally, hedonic), while almost any social choice function can be implemented in undominated Nash equilibrium, only monotonic social choice functions can be implemented in the closure of the undominated Nash correspondence.

Original languageEnglish (US)
Pages (from-to)857-871
Number of pages15
JournalEconometrica
Volume71
Issue number3
DOIs
StatePublished - 2003

Keywords

  • Implementation
  • Near-complete information
  • Undominated Nash equilibrium

ASJC Scopus subject areas

  • Economics and Econometrics

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