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Nash Implementation in Production Economies with Unequal Skills: A Characterization

Author

Listed:
  • Naoki Yoshihara

    (School of Management, Kochi University of Technology)

  • Akira Yamada

    (Sapporo University)

Abstract

The present study examines production economies with unequal labor skills, where the planner is ignorant of the set of feasible allocations in advance of production. In particular, we characterize Nash implementation by canonical mechanisms by means of Maskin monotonicity and a new axiom, non-manipulability of unused skills (NUS), where the latter represents a weak independence property with respect to changes in skills. Following these characterizations, we show that some Maskin monotonic social choice correspondences are not implementable if information about individual skills is absent.

Suggested Citation

  • Naoki Yoshihara & Akira Yamada, 2018. "Nash Implementation in Production Economies with Unequal Skills: A Characterization," Working Papers SDES-2018-18, Kochi University of Technology, School of Economics and Management, revised Dec 2018.
    • Handle: RePEc:kch:wpaper:sdes-2018-18
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    References listed on IDEAS

    as
    1. Eric Maskin, 1999. "Nash Equilibrium and Welfare Optimality," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 66(1), pages 23-38.
    2. Naoki Yoshihara, 2000. "A characterization of natural and double implementation in production economies," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 17(4), pages 571-599.
    3. Tian Guoqiang & Li Qi, 1995. "On Nash-Implementation in the Presence of Withholding," Games and Economic Behavior, Elsevier, vol. 9(2), pages 222-233, May.
    4. Naoki Yoshihara, 1999. "Natural and double implementation of public ownership solutions in differentiable production economies," Review of Economic Design, Springer;Society for Economic Design, vol. 4(2), pages 127-151.
    5. Yoshihara, Naoki & 吉原, 直毅 & Yamada, Akira & 山田, 玲良, 2010. "Nash Implementation in Production Economies with Unequal Skills: A Complete Characterization," CCES Discussion Paper Series 38, Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University.
    6. Hong, Lu, 1995. "Nash Implementation in Production Economies," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 5(3), pages 401-417, May.
    7. Michele Lombardi & Naoki Yoshihara, 2013. "A full characterization of nash implementation with strategy space reduction," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 54(1), pages 131-151, September.
    8. Akira Yamada & Naoki Yoshihara, 2008. "Mechanism design for a solution to the tragedy of commons," Review of Economic Design, Springer;Society for Economic Design, vol. 11(4), pages 253-270, February.
    9. Matthew O. Jackson, 2001. "A crash course in implementation theory," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 18(4), pages 655-708.
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    12. Tian, Guoqiang, 2009. "Implementation in economies with non-convex production technologies unknown to the designer," Games and Economic Behavior, Elsevier, vol. 66(1), pages 526-545, May.
    13. Kaplan, Todd R & Wettstein, David, 2000. "Surplus Sharing with a Two-State Mechanism," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(2), pages 399-409, May.
    14. Shin, Sungwhee & Suh, Sang-Chul, 1997. "Double Implementation by a Simple Game Form in the Commons Problem," Journal of Economic Theory, Elsevier, vol. 77(1), pages 205-213, November.
    15. Fleurbaey, Marc & Maniquet, Francois, 1996. "Fair allocation with unequal production skills: The No Envy approach to compensation," Mathematical Social Sciences, Elsevier, vol. 32(1), pages 71-93, August.
    16. Akira Yamada & Naoki Yoshihara, 2007. "Triple implementation by sharing mechanisms in production economies with unequal labor skills," International Journal of Game Theory, Springer;Game Theory Society, vol. 36(1), pages 85-106, September.
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    18. Moore, John & Repullo, Rafael, 1990. "Nash Implementation: A Full Characterization," Econometrica, Econometric Society, vol. 58(5), pages 1083-1099, September.
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    More about this item

    Keywords

    Unequal labor skills; Nash implementation; Canonical mechanisms; Non-manipulability of unused skills;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • 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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