Logo
Munich Personal RePEc Archive

A note on the definition of Bayesian Nash equilibrium of a mechanism when strategies of agents are costly actions

Wu, Haoyang (2019): A note on the definition of Bayesian Nash equilibrium of a mechanism when strategies of agents are costly actions.

Warning
There is a more recent version of this item available.
[thumbnail of MPRA_paper_93088.pdf] PDF
MPRA_paper_93088.pdf

Download (78kB)

Abstract

In the framework of mechanism design theory, in order to implement a desired social choice function in Bayesian Nash equilibrium, a designer constructs a mechanism which specifies her favorite outcome for each possible profile of agents' types. Generally speaking, each agent's strategy has two possible formats: an action, or a message. In this paper, we focus on the former case and claim that the definitions of Bayesian Nash equilibrium of a mechanism and Bayesian incentive compatibility should all be based on a profit function instead of a utility function. Next, we derive the main result: Given a social choice function which can be implemented by an indirect mechanism in Bayesian Nash equilibrium, if all strategies of agents are costly actions, then it cannot be inferred that there exists a direct mechanism that can truthfully implement the social choice function in Bayesian Nash equilibrium.

Available Versions of this Item

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

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