Events

Abstract

We consider mechanism design environments with common knowledge of identicality that is in which agents commonly know that types are identically distributed without assuming that they or the designer would know the distribution. Under this assumption, we explore partial and full implementa¬tion, as well as robustness. First, we characterize the transfers which are incentive compatible under common knowledge of identicality, and provide necessary and sufficient conditions for partial implementation. We show that these conditions imply for all implementing mechanisms that a particular constraint holds on strategic externalities. Second, within this constraint, we characterize the conditions under which full implementation is possible via direct mechanisms. We construct the loading transfer schemes and we show that these are the transfers which achieve full implementation whenever this is possible. Finally, we study the robustness properties of the implementing transfers with respect to misspecifications of agents’ preferences and with respect to lower orders beliefs in rationality.

The Learning, Games and Networks Seminars are convened by David Delacretaz and Bernhard Kasberger.