Adaptive Dynamics and the Implementation Problem with Complete Information

Universitat Pompeu Fabra Working Paper No. 179

25 Pages Posted: 12 Mar 1997

See all articles by Antonio Cabrales

Antonio Cabrales

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Abstract

This paper studies the equilibrating process of several implementation mechanisms using naive adaptive dynamics. We show that the dynamics converge and are stable, for the canonical mechanism of implementation in Nash equilibrium. In this way we cast some doubt on the criticism of "complexity" commonly used against this mechanism. For mechanisms that use more refined equilibrium concepts, the dynamics converge but are not stable. Some papers in the literature on implementation with refined equilibrium concepts have claimed that the mechanisms they propose are "simple" and implement "everything" (in contrast with the canonical mechanism). The fact that some of these "simple" mechanisms have unstable equilibria suggests that these statements should be interpreted with some caution.

JEL Classification: C72, D70, D78

Suggested Citation

Cabrales, Antonio, Adaptive Dynamics and the Implementation Problem with Complete Information. Universitat Pompeu Fabra Working Paper No. 179. Available at SSRN: https://ssrn.com/abstract=1994 or http://dx.doi.org/10.2139/ssrn.1994

Antonio Cabrales (Contact Author)

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
(34-93) 542 27 65 (Phone)
(34-93) 542 17 46 (Fax)

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