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Perfect implementation

Author

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  • Izmalkov, Sergei
  • Lepinski, Matt
  • Micali, Silvio

Abstract

Privacy and trust affect our strategic thinking, yet have not been precisely modeled in mechanism design. In settings of incomplete information, traditional implementations of a normal-form mechanism--by disregarding the players' privacy, or assuming trust in a mediator--may fail to reach the mechanism's objectives. We thus investigate implementations of a new type. We put forward the notion of a perfect implementation of a normal-form mechanism : in essence, a concrete extensive-form mechanism exactly preserving all strategic properties of , without relying on trusted mediators or violating the players' privacy. We prove that any normal-form mechanism can be perfectly implemented by a verifiable mediator using envelopes and an envelope-randomizing device. Differently from a trusted mediator, a verifiable one only performs prescribed public actions, so that everyone can verify that he is acting properly, and that he never learns any information that should remain private.

Suggested Citation

  • Izmalkov, Sergei & Lepinski, Matt & Micali, Silvio, 2011. "Perfect implementation," Games and Economic Behavior, Elsevier, vol. 71(1), pages 121-140, January.
    • Handle: RePEc:eee:gamebe:v:71:y:2011:i:1:p:121-140
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    6. Ran Canetti & Amos Fiat & Yannai A. Gonczarowski, 2023. "Zero-Knowledge Mechanisms," Papers 2302.05590, arXiv.org.

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    Keywords

    Mechanism design Trust Privacy;

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