|Original language||English (US)|
|Title of host publication||The New Palgrave Dictionary of Economics|
|Editors||Steven N. Durlauf, Lawrence E. Blume|
|State||Published - 2008|
Mechanism design concerns the question: given some desirable outcome, can we design a game which produces it? This theory provides a foundation for many important fields, such as auction theory and contract theory. We survey the recent literature dealing with topics such as robustness of mechanisms, renegotiation and collusion. An important issue is whether simple and intuitively appealing mechanisms can be optimal. Finally, we discuss what can be learned from recent experiments.