A New Necessary Condition For Implementation in Iteratively Undominated Strategies
13 Pages Posted: 27 Mar 2010
Date Written: January 19, 2010
Implementation in iteratively undominated strategies relies on permissive conditions. However, for the sufficiency results available, authors have relied on assumptions that amount to quasilinear preferences on a numeraire. We uncover a new necessary condition that implies that such assumptions cannot be dispensed with. We term the condition “restricted deception-proofness.” It requires that, in environments with identical preferences, the social choice function be immune to all deceptions, making it then stronger than incentive compatibility. In some environments the conditions for (exact or approximate) implementation are more restrictive than previously thought.
Keywords: mechanism design, exact and approximate implementation, iteratively
JEL Classification: C72, D78, D82
Suggested Citation: Suggested Citation