Implementation in adaptive better-response dynamics: Towards a general theory of bounded rationality in mechanisms

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dc.contributor.author Cabrales, Antonio
dc.contributor.author Serrano, Roberto
dc.date.accessioned 2012-01-03T16:47:18Z
dc.date.available 2012-01-03T16:47:18Z
dc.date.issued 2011-03-21
dc.identifier.bibliographicCitation Games and Economic Behavior, vol. 73, nº 2, November 2011, p. 360-374
dc.identifier.issn 0899-8256
dc.identifier.uri http://hdl.handle.net/10016/12895
dc.description.abstract We study the classic implementation problem under the behavioral assumption that agents myopically adjust their actions in the direction of better-responses or bestresponses. First, we show that a necessary condition for recurrent implementation in better-response dynamics (BRD) is a small variation of Maskin monotonicity, which we call quasimonotonicity. We also provide a mechanism for implementation in BRD if the rule is quasimonotonic and excludes worst alternatives – no worst alternative (NWA). Quasimonotonicity and NWA are both necessary and sufficient for absorbing implementation in BRD. Moreover, they characterize implementation in strict Nash equilibria. Under incomplete information, incentive compatibility is necessary for any kind of stable implementation in our sense, while Bayesian quasimonotonicity is necessary for recurrent implementation in interim BRD. Both conditions are also essentially sufficient for recurrent implementation, together with a Bayesian NWA. A characterization of implementation in strict Bayesian equilibria is also provided. Partial implementation results are also obtained.
dc.format.mimetype application/pdf
dc.language.iso eng
dc.publisher Elsevier
dc.rights © 2011 Elsevier Inc. All rights reserved.
dc.subject.other Robust implementation
dc.subject.other Bounded rationality
dc.subject.other Evolutionary dynamics
dc.subject.other Mechanisms
dc.title Implementation in adaptive better-response dynamics: Towards a general theory of bounded rationality in mechanisms
dc.type article
dc.description.status Publicado
dc.relation.publisherversion http://dx.doi.org/10.1016/j.geb.2011.03.003
dc.subject.jel C72
dc.subject.jel D70
dc.subject.jel D78
dc.subject.eciencia Economía
dc.identifier.doi 10.1016/j.geb.2011.03.003
dc.rights.accessRights openAccess
dc.type.version acceptedVersion
dc.identifier.publicationfirstpage 360
dc.identifier.publicationissue 2
dc.identifier.publicationlastpage 374
dc.identifier.publicationtitle Games and Economic Behavior
dc.identifier.publicationvolume 73
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