Mechanism Design and Communication Networks

65 Pages Posted: 17 Oct 2008 Last revised: 10 Jan 2010

See all articles by Ludovic Renou

Ludovic Renou

Queen Mary University of London

Tristan Tomala

Université Paris I Panthéon-Sorbonne

Date Written: January 5, 2010

Abstract

This paper studies a mechanism design model where the players and the designer are nodes in a communication network. We characterize the communication networks (directed graphs) for which, in any environment (utilities and beliefs), every incentive compatible social choice function is implementable. We show that any incentive compatible social choice function is implementable on a given communication network, in all environments with either common independent beliefs and private values or a worst outcome, if and only if the network is strongly connected and weakly 2-connected. A network is strongly connected if for each player, there exists a directed path to the designer. It is weakly 2-connected if each player is either directly connected to the designer or indirectly connected to the esigner through two disjoint paths, not necessarily directed We couple encryption techniques together with appropriate incentives to secure the transmission of each player’s private information to the designer.

Keywords: Mechanism design, incentives, Bayesian equilibrium, communication networks, encryption, secure transmission, coding

JEL Classification: C7

Suggested Citation

Renou, Ludovic and Tomala, Tristan, Mechanism Design and Communication Networks (January 5, 2010). Available at SSRN: https://ssrn.com/abstract=1285424 or http://dx.doi.org/10.2139/ssrn.1285424

Ludovic Renou (Contact Author)

Queen Mary University of London ( email )

Mile End Road
London, London E1 4NS
United Kingdom

Tristan Tomala

Université Paris I Panthéon-Sorbonne ( email )

12, place du Panthéon
Paris, IL
France

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
81
Abstract Views
1,046
rank
403,516
PlumX Metrics