Credible implementation

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Show simple item record Corchón, Luis C. Chakravorti, B. Wilkie, Simon 2009-03-12T09:04:32Z 2009-03-12T09:04:32Z 2006
dc.identifier.bibliographicCitation Games and Economic Behavior. 2006, vol. 57, nº 1, p. 18-36
dc.identifier.issn 0899-8256
dc.description.abstract The theory of implementation abounds with mechanisms with intricate systems of rewards and punishments off-the-equilibrium path. Generally, it is not in the designer’s best interest to go through with the reward/punishment in the “subgame” arising from some disequilibrium play. This would make the mechanism’s outcome function non-credible. We define a notion of credible implementation and, in the domain of exchange economies, we show that (a) the non-dictatorial Pareto correspondence can be credibly implemented (b) there is no credibly implementable Pareto-efficient and individually rational social choice rule (SCR) and (c) there is no credibly implementable Pareto-efficient and envy-free SCR. We derive necessary and sufficient conditions for credible implementability of SCR. Themain implication is that it is sub-optimal for the designer to be endowed with “too much” information about the economy. Finally, we show that the negative results persist under weaker credibility requirements.
dc.format.mimetype application/pdf
dc.language.iso eng
dc.publisher Elsevier
dc.subject.other Credibility
dc.subject.other Implementation
dc.subject.other Renegotiation
dc.subject.other Commitment
dc.title Credible implementation
dc.type article PeerReviewed
dc.description.status Publicado
dc.subject.jel C70
dc.subject.jel D70
dc.subject.eciencia Economía
dc.identifier.doi 10.1016/j.geb.2005.09.001
dc.rights.accessRights openAccess
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