Equilibrium rejection of a mechanism

B-Tier
Journal: Games and Economic Behavior
Year: 2011
Volume: 73
Issue: 2
Pages: 375-387

Authors (2)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We study a mechanism design problem in which players can take part in a mechanism to coordinate their actions in a default game. By refusing to participate in the mechanism, a player can revert to playing the default game non-cooperatively. We show with an example that some allocation rules are implementable only with mechanisms which will be rejected on the equilibrium path. In our construction, a refusal to participate conveys information about the types of the players. This information causes the default game to be played under different beliefs, and more importantly under different higher order beliefs, than the interim ones. We find a lower bound on all the implementable payoffs. We use this bound to establish a condition on the default game under which all the implementable outcomes are truthfully implementable, without the need to induce rejection of the mechanism.

Technical Details

RePEc Handle
repec:eee:gamebe:v:73:y:2011:i:2:p:375-387
Journal Field
Theory
Author Count
2
Added to Database
2026-01-25