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Nash implementation with lottery mechanisms

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  • Bochet, O.L.A.

    (Microeconomics & Public Economics)

Abstract

Consider the problem of exact Nash Implementation of social choice correspondences. Define a lottery mechanism as a mechanism in which the planner can randomize on alternatives out of equilibrium while pure alternatives are always chosen in equilibrium. When preferences over alternatives are strict, we show that Maskin monotonicity (Maskin, 1999) is both necessary and sufficient for a social choice correspondence to be Nash implementable. We discuss how to relax the assumption of strict preferences. Next, we examine social choice correspondences with private components. Finally, we apply our method to the issue of voluntary implementation (Jackson and Palfrey, 2001).
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Suggested Citation

  • Bochet, O.L.A., 2005. "Nash implementation with lottery mechanisms," Research Memorandum 038, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    • Handle: RePEc:unm:umamet:2005038
    DOI: 10.26481/umamet.2005038
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    1. Martine Labbé & Patrice Marcotte & Gilles Savard, 1998. "A Bilevel Model of Taxation and Its Application to Optimal Highway Pricing," Management Science, INFORMS, vol. 44(12-Part-1), pages 1608-1622, December.
    2. Jackson, Matthew O. & Palfrey, Thomas R., 2001. "Voluntary Implementation," Journal of Economic Theory, Elsevier, vol. 98(1), pages 1-25, May.
    3. Grigoriev, A. & van Hoesel, C.P.M. & van der Kraaij, A.F. & Uetz, M.J. & Bouhtou, M., 2004. "Pricing network edges to cross a river," Research Memorandum 009, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
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    11. K. J. Arrow & A. K. Sen & K. Suzumura (ed.), 2002. "Handbook of Social Choice and Welfare," Handbook of Social Choice and Welfare, Elsevier, edition 1, volume 1, number 1.
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