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arXiv · 2105.12298

Direct Implementation with Evidence

Soumen Banerjee·Yi-Chun Chen·Yifei Sun
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Abstract

We study full implementation with evidence in an environment with bounded utilities. We show that a social choice function is Nash implementable in a direct revelation mechanism if and only if it satisfies the measurability condition proposed by BL2012 . Building on a novel classification of lies according to their refutability with evidence, the mechanism requires only two agents, accounts for mixed-strategy equilibria and accommodates evidentiary costs. While monetary transfers are used, they are off the equilibrium and can be balanced with three or more agents. In a richer model of evidence due to KT2012 , we establish pure-strategy implementation with two or more agents in a direct revelation mechanism. We also obtain a necessary and sufficient condition on the evidence structure for renegotiation-proof bilateral contracts, based on the classification of lies.

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Soumen Banerjee, Yi-Chun Chen, Yifei Sun. 2021-05-26. Direct Implementation with Evidence. https://arxiv.org/abs/2105.12298

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