Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/150124
Authors: 
Bergemann, Dirk
Morris, Stephen
Year of Publication: 
2009
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 4 [Year:] 2009 [Issue:] 1 [Pages:] 45-88
Abstract: 
In a general interdependent preference environment, we characterize when two payoff types can be distinguished by their rationalizable strategic choices without any prior knowledge of their beliefs and higher order beliefs. We show that two payoff types are strategically distinguishable if and only if they satisfy a separability condition. The separability condition for each agent essentially requires that there is not too much interdependence in preferences across agents. A social choice function, mapping payoff type profiles to outcomes, can be robustly virtually implemented if there exists a mechanism such that every equilibrium on every type space achieves an outcome that is arbitrarily close to the outcome generated by the social choice function. This definition is equivalent to requiring virtual implementation in iterated deletion of strategies that are strictly dominated for all beliefs. The social choice function is robustly measurable if strategically indistinguishable payoff types receive the same allocation. We show that ex post incentive compatibility and robust measurability are necessary and sufficient for robust virtual implementation.
Subjects: 
Mechanism design
virtual implementation
robust implementation
rationalizability
ex-post incentive compatibility
JEL: 
C79
D82
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0
Document Type: 
Article

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.