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On the equivalence between Bayesian and dominant strategy implementation: the case of correlated types

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  • Alexey Kushnir

Abstract

We consider general social choice environments with private values and correlated types. Each agent's matrix of conditional probabilities satisfies the full rank condition. We show that for any Bayesian incentive compatible mechanism there exists a dominant strategy incentive compatible mechanism that delivers the same interim expected utilities to all agents and generates at least the same social surplus. In addition, if there is a social alternative that is inferior to the other alternatives for all agents the dominant strategy incentive compatible mechanism matches exactly the social surplus. These results extend to environments with interdependent values satisfying the single crossing condition.

Suggested Citation

  • Alexey Kushnir, 2013. "On the equivalence between Bayesian and dominant strategy implementation: the case of correlated types," ECON - Working Papers 129, Department of Economics - University of Zurich.
    • Handle: RePEc:zur:econwp:129
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    File URL: https://www.zora.uzh.ch/id/eprint/79952/1/econwp129.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Mechanism design; Bayesian implementation; dominant strategy implementation; full surplus extraction; correlation;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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