On the Equivalence of Bayesian and Dominant Strategy Implementation for Environments with Non-Linear Utilities

Economic Theory, 67, 2019

30 Pages Posted: 12 Nov 2015 Last revised: 21 Jul 2019

See all articles by Alexey Kushnir

Alexey Kushnir

Carnegie Mellon University - David A. Tepper School of Business

Shuo Liu

Peking University - Guanghua School of Management

Abstract

We extend the equivalence between Bayesian and dominant strategy implementation (Manelli and Vincent, Econometrica, 2010; Gershkov et al. Econometrica, 2013) to environments where agents have utilities that are non-linear in allocations and satisfy a convex-valued assumption. The new equivalence result produces novel implications to the literature on the principal-agent problem with allocative externalities, environmental mechanism design, and public good provision.

Keywords: Bayesian implementation, dominant strategy implementation, mechanism design, non-linear utilities, increasing differences over distributions

JEL Classification: D82

Suggested Citation

Kushnir, Alexey I. and Liu, Shuo, On the Equivalence of Bayesian and Dominant Strategy Implementation for Environments with Non-Linear Utilities. Economic Theory, 67, 2019, Available at SSRN: https://ssrn.com/abstract=2688708 or http://dx.doi.org/10.2139/ssrn.2688708

Alexey I. Kushnir

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

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States

Shuo Liu (Contact Author)

Peking University - Guanghua School of Management ( email )

Peking University
Beijing, Beijing 100871
China

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