Munich Personal RePEc Archive

A Bayesian implementable social choice function cannot be implemented by a direct mechanism

Wu, Haoyang (2016): A Bayesian implementable social choice function cannot be implemented by a direct mechanism.

WarningThere is a more recent version of this item available.
[img]
Preview
PDF
MPRA_paper_73660.pdf

Download (67kB) | Preview

Abstract

The revelation principle is a fundamental theorem in many economics fields such as game theory, mechanism design and auction theory etc. In this paper, I construct an example to show that a social choice function which can be implemented in Bayesian Nash equilibrium by an indirect mechanism cannot be implemented by a direct mechanism. The key point is that agents pay cost in the indirect mechanism, but pay nothing in the direct mechanism. As a result, the revelation principle does not hold at all.

Available Versions of this Item

Logo of the University Library LMU Munich
MPRA is a RePEc service hosted by
the University Library LMU Munich in Germany.