On the Equivalence between Bayesian and Dominant Strategy Implementation: The Case of Correlated Types

University of Zurich Department of Economics Working Paper No. 129

10 Pages Posted: 16 Aug 2013

See all articles by Alexey Kushnir

Alexey Kushnir

Carnegie Mellon University - David A. Tepper School of Business

Date Written: August 1, 2013

Abstract

We consider general social choice environments with private values and correlated types. Each agent's matrix of conditional probabilities satisfies the full rank condition. We show that for any Bayesian incentive compatible mechanism there exists a dominant strategy incentive compatible mechanism that delivers the same interim expected utilities to all agents and generates at least the same social surplus. In addition, if there is a social alternative that is inferior to the other alternatives for all agents the dominant strategy incentive compatible mechanism matches exactly the social surplus. These results extend to environments with interdependent values satisfying the single crossing condition.

Keywords: Mechanism design, Bayesian implementation, dominant strategy implementation, full surplus extraction, correlation

JEL Classification: D82

Suggested Citation

Kushnir, Alexey I., On the Equivalence between Bayesian and Dominant Strategy Implementation: The Case of Correlated Types (August 1, 2013). University of Zurich Department of Economics Working Paper No. 129, Available at SSRN: https://ssrn.com/abstract=2309994 or http://dx.doi.org/10.2139/ssrn.2309994

Alexey I. Kushnir (Contact Author)

Carnegie Mellon University - David A. Tepper School of Business ( email )

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Pittsburgh, PA 15213-3890
United States

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