The Theory of Implementation. What Did We Learn?
40 Pages Posted: 17 Nov 2015
Date Written: November 13, 2015
Abstract
In this survey we review the most important aspects of Implementation theory. We present the notions of a mechanism, a social choice correspondence and that of implementation. We first review the main contributions to implementation under dominant strategies namely the impossibility theorems that show the impossibility to implement efficient allocations when the preference domain is sufficiently large. Then we review Nash implementation and we show that a Maskin monotonic social choice correspondence satisfying no veto power can be implemented. Finally we review the case of Bayesian equilibrium, a kind of intermediate case between Nash and Dominant strategy implementation.
Keywords: Mechanism, Implementation, Design
JEL Classification: C70, H41
Suggested Citation: Suggested Citation