Munich Personal RePEc Archive

# The revelation principle fails when the format of each agent's strategy is an action

Wu, Haoyang (2020): The revelation principle fails when the format of each agent's strategy is an action.

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MPRA_paper_104554.pdf

This paper aims to propose a failure of the revelation principle. We point out that in any game the format of each agent's strategy is either an informational message or a realistic action, and the action format is very common in many practical cases. The main result is that: For any given social choice function, if the mechanism which implements it has action-format strategies, then \emph{honest and obedient}'' will no longer be the Bayesian Nash equilibrium of the direct mechanism, actually the social choice function can only be implemented \emph{dishonestly and disobediently}'' in Bayesian Nash equilibrium by the direct mechanism. Consequently, the revelation principle fails when the format of each agent's strategy is an action.