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Role of Honesty in Full Implementation ( Revised version of CARF-F-015(2004) )

Author

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  • Hitoshi Matsushima

    (Faculty of Economics, University of Tokyo)

Abstract

This paper introduces a new concept for full implementation that takes into account agents' preferences for understanding how the "process" works. We assume that the agents have an intrinsic preference for honesty in the sense that they dislike the idea of lying when it does not influence their welfare but instead goes against the intention of the principal. We show that the presence of such preferences functions very effectively in eliminating unwanted equilibria from the practical perspectives, even if the degree of preference for honesty is small. The mechanisms designed are detail-free and involve only small fines.

Suggested Citation

  • Hitoshi Matsushima, 2006. "Role of Honesty in Full Implementation ( Revised version of CARF-F-015(2004) )," CARF F-Series CARF-F-062, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
    • Handle: RePEc:cfi:fseres:cf062
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    File URL: https://www.carf.e.u-tokyo.ac.jp/old/pdf/workingpaper/fseries/63.pdf
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    References listed on IDEAS

    as
    1. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, April.
    2. Matsushima Hitoshi, 1993. "Bayesian Monotonicity with Side Payments," Journal of Economic Theory, Elsevier, vol. 59(1), pages 107-121, February.
    3. Abreu Dilip & Matsushima Hitoshi, 1994. "Exact Implementation," Journal of Economic Theory, Elsevier, vol. 64(1), pages 1-19, October.
    4. Uri Gneezy, 2005. "Deception: The Role of Consequences," American Economic Review, American Economic Association, vol. 95(1), pages 384-394, March.
    5. Glazer, Jacob & Rubinstein, Ariel, 1998. "Motives and Implementation: On the Design of Mechanisms to Elicit Opinions," Journal of Economic Theory, Elsevier, vol. 79(2), pages 157-173, April.
    6. Baiman, S & Lewis, Bl, 1989. "An Experiment Testing The Behavioral Equivalence Of Strategically Equivalent Employment Contracts," Journal of Accounting Research, Wiley Blackwell, vol. 27(1), pages 1-20.
    7. Kfir Eliaz, 2002. "Fault Tolerant Implementation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(3), pages 589-610.
    Full references (including those not matched with items on IDEAS)

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