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A new necessary condition for implementation in iteratively undominated strategies

Author

Listed:
  • Takashi Kunimoto

    (McGill University and CIREQ)

  • Roberto Serrano

    (Brown University and IMDEA Social Sciences)

Abstract

Implementation in iteratively undominated strategies relies on permissive conditions. However, for the sufficiency results available, authors have relied on assumptions that amount to quasilinear preferences on a numeraire. We uncover a new necessary condition that implies that such assumptions cannot be dispensed with. We term the condition “restricted deception-proofness.” It requires that, in environments with identical preferences, the social choice function be immune to all deceptions, making it then stronger than incentive compatibility. In some environments the conditions for (exact or approximate) implementation are more restrictive than previously thought.

Suggested Citation

  • Takashi Kunimoto & Roberto Serrano, 2010. "A new necessary condition for implementation in iteratively undominated strategies," Working Papers 2010-03, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
    • Handle: RePEc:imd:wpaper:wp2010-03
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    References listed on IDEAS

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    1. Dirk Bergemann & Stephen Morris & Olivier Tercieux, 2012. "Rationalizable Implementation," World Scientific Book Chapters, in: Robust Mechanism Design The Role of Private Information and Higher Order Beliefs, chapter 11, pages 375-404, World Scientific Publishing Co. Pte. Ltd..
    2. Dirk Bergemann & Stephen Morris, 2012. "Robust Virtual Implementation," World Scientific Book Chapters, in: Robust Mechanism Design The Role of Private Information and Higher Order Beliefs, chapter 8, pages 263-317, World Scientific Publishing Co. Pte. Ltd..
    3. Martin Dufwenberg & Mark Stegeman, 2002. "Existence and Uniqueness of Maximal Reductions Under Iterated Strict Dominance," Econometrica, Econometric Society, vol. 70(5), pages 2007-2023, September.
    4. Georgy Artemov & Takashi Kunimoto & Roberto Serrano, 2007. "Robust Virtual Implementation with Incomplete Information: Toward a Reinterpretation of the Wilson Doctrine," Working Papers 2007-6, Brown University, Department of Economics.
    5. Takashi Kunimoto & Roberto Serrano, 2010. "Evaluating the conditions for robust mechanism design," Working Papers 2010-05, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
    6. Palfrey, Thomas R & Srivastava, Sanjay, 1989. "Mechanism Design with Incomplete Information: A Solution to the Implementation Problem," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 668-691, June.
    7. Eric Maskin, 1999. "Nash Equilibrium and Welfare Optimality," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 66(1), pages 23-38.
    8. Serrano, Roberto & Vohra, Rajiv, 2010. "Multiplicity of mixed equilibria in mechanisms: A unified approach to exact and approximate implementation," Journal of Mathematical Economics, Elsevier, vol. 46(5), pages 775-785, September.
    9. Chen, Yi-Chun & Long, Ngo Van & Luo, Xiao, 2007. "Iterated strict dominance in general games," Games and Economic Behavior, Elsevier, vol. 61(2), pages 299-315, November.
    10. John Duggan, 1997. "Virtual Bayesian Implementation," Econometrica, Econometric Society, vol. 65(5), pages 1175-1200, September.
    11. Abreu, Dilip & Matsushima, Hitoshi, 1992. "A Response [Virtual Implementation in Iteratively Undominated Strategies I: Complete Information]," Econometrica, Econometric Society, vol. 60(6), pages 1439-1442, November.
    12. Serrano, Roberto & Vohra, Rajiv, 2005. "A characterization of virtual Bayesian implementation," Games and Economic Behavior, Elsevier, vol. 50(2), pages 312-331, February.
    13. Dipjyoti Majumdar & Arunava Sen, 2004. "Ordinally Bayesian Incentive Compatible Voting Rules," Econometrica, Econometric Society, vol. 72(2), pages 523-540, March.
    14. Abreu, Dilip & Matsushima, Hitoshi, 1992. "Virtual Implementation in Iteratively Undominated Strategies: Complete Information," Econometrica, Econometric Society, vol. 60(5), pages 993-1008, September.
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    Cited by:

    1. Jain, Ritesh, 2021. "Rationalizable implementation of social choice correspondences," Games and Economic Behavior, Elsevier, vol. 127(C), pages 47-66.
    2. Ritesh Jain & Michele Lombardi, 2019. "Virtual implementation by bounded mechanisms: Complete information," IEAS Working Paper : academic research 19-A001, Institute of Economics, Academia Sinica, Taipei, Taiwan.
    3. Artemov, Georgy, 2015. "Time and Nash implementation," Games and Economic Behavior, Elsevier, vol. 91(C), pages 229-236.
    4. Jain, Ritesh & Lombardi, Michele, 2022. "Continuous virtual implementation: Complete information," Journal of Mathematical Economics, Elsevier, vol. 99(C).
    5. Hsieh, Yue-Da & Qian, Xuewen & Qu, Chen, 2023. "Iterated bounded dominance," Economics Letters, Elsevier, vol. 232(C).
    6. Yi-Chun Chen & Xiao Luo & Chen Qu, 2016. "Rationalizability in general situations," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 61(1), pages 147-167, January.
    7. Kunimoto, Takashi, 2020. "Robust virtual implementation with almost complete information," Mathematical Social Sciences, Elsevier, vol. 108(C), pages 62-73.
    8. Artemov, Georgy & Kunimoto, Takashi & Serrano, Roberto, 2013. "Robust virtual implementation: Toward a reinterpretation of the Wilson doctrine," Journal of Economic Theory, Elsevier, vol. 148(2), pages 424-447.

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    More about this item

    Keywords

    mechanism design; exact and approximate implementation; iteratively undominated strategies; restricted deception-proofness; incentive compatibility; measurability;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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