Robust implementation with peer mechanisms and evidence
57 Pages Posted: 23 Nov 2016 Last revised: 29 Nov 2023
Date Written: November 24, 2023
Abstract
A principal must allocate a prize without monetary transfers. She wants to give it to the highest value agent. Agents know their own and their neighbors’ values, as determined by a network. Competing for the prize, agents send messages about themselves (applications) and their neighbors (references). They face a limit to lying, so information is partially verifiable. No incentive-compatible mechanism achieves robust implementation. Assigning the prize as a function of best applications and worst references achieves dominant strategy implementation for all networks and full implementation for the complete network and a class of networks if agents are partially honest.
Keywords: network, mechanism design, peer mechanism, prize allocation, implementation, evidence, partial honesty
JEL Classification: C72, D82, D83, D85
Suggested Citation: Suggested Citation