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Hard Evidence and Mechanism Design

Author

Listed:
  • Watson, Joel
  • Bull, Jesse

Abstract

This paper addresses how hard evidence can be incorporated intomechanismdesign analysis. Two classes of models are compared: (a) ones in which evidentiary decisions are accounted for explicitly, and (b) ones in which the players make abstract declarations of their types. Conditions are provided under which versions of these models are equivalent. The paper also addresses whether dynamic mechanisms are required for Nash implementation in settings with hard evidence. The paper shows that static mechanisms suffice in the setting of “evidentiary normality” and that, in a more general environment, one can restrict attention to a class of three-stage dynamic mechanisms.

Suggested Citation

  • Watson, Joel & Bull, Jesse, 2006. "Hard Evidence and Mechanism Design," University of California at San Diego, Economics Working Paper Series qt7973v805, Department of Economics, UC San Diego.
    • Handle: RePEc:cdl:ucsdec:qt7973v805
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    References listed on IDEAS

    as
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    12. Forges, Francoise & Koessler, Frederic, 2005. "Communication equilibria with partially verifiable types," Journal of Mathematical Economics, Elsevier, vol. 41(7), pages 793-811, November.
    13. Bull Jesse, 2008. "Costly Evidence Production and the Limits of Verifiability," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 8(1), pages 1-28, July.
    14. Shin Hyun Song, 1994. "The Burden of Proof in a Game of Persuasion," Journal of Economic Theory, Elsevier, vol. 64(1), pages 253-264, October.
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    18. Bull, Jesse & Watson, Joel, 2000. "Evidence Disclosure and Verifiability," University of California at San Diego, Economics Working Paper Series qt6th0060j, Department of Economics, UC San Diego.
    19. Partha Dasgupta & Peter Hammond & Eric Maskin, 1979. "The Implementation of Social Choice Rules: Some General Results on Incentive Compatibility," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 46(2), pages 185-216.
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    More about this item

    Keywords

    contract; mechanism design; hard evidence; verifiability; revelation principle; static mechanisms; dynamic mechanisms;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • K10 - Law and Economics - - Basic Areas of Law - - - General (Constitutional Law)

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