Local incentive compatibility in ordinal type-spaces

Kumar, Ujjwal and Roy, Souvik (2021): Local incentive compatibility in ordinal type-spaces.

Abstract

We explore the relation between different notions of local incentive compatibility (LIC) and incentive compatibility (IC) on ordinal type-spaces. In this context, we introduce the notion of ordinal local global equivalent (OLGE) and cardinal local global equivalent (CLGE) environments. First, we establish the equivalence between the two environments on strict ordinal type-spaces. Next, we consider ordinal type-spaces admitting indifference. We introduce the notion of almost everywhere IC and strong LIC, and provide a necessary and sufficient condition on ordinal type spaces for their equivalence. Finally, we provide results on how to (minimally) check the IC property of a given mechanism on any ordinal type-space and show that local types along with the boundary types form a minimal set of incentive constraints that imply full incentive compatibility.

• Item Type: MPRA Paper
• Language: English
• Keywords: point-wise local incentive compatibility, adjusted local incentive compatibility, uniform local incentive compatibility, (global) incentive compatibility, ordinal type-spaces
• Subjects: D - Microeconomics > D4 - Market Structure, Pricing, and Design > D44 - Auctions; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D47 - Market Design; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information ; Mechanism Design

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