A Theory of Simplicity in Games and Mechanism Design

71 Pages Posted: 18 Oct 2016 Last revised: 15 Sep 2019

See all articles by Marek Pycia

Marek Pycia

University of Zurich

Peter Troyan

University of Virginia (UVA) - Economics

Date Written: July 1, 2019

Abstract

We introduce a general class of simplicity concepts that vary the foresight abilities required of agents in extensive-form games, and use it to provide characterizations of simple mechanisms in social choice environments with and without transfers. We show that obvious strategy-proofness—an important simplicity concept included in our class—is characterized by clinch-or-pass games we call millipede games. Some millipede games are indeed simple and widely-used, though others may be complex, requiring significant foresight on the part of the agents, and are rarely observed. Weakening the foresight abilities assumed of the agents eliminates these complex millipede games, leaving monotonic games as the only simple games, a class which includes ascending auctions. As an application, we explain the widespread popularity of the well-known Random Priority mechanism by showing it is the unique mechanism that is efficient, fair, and simple to play.

Keywords: obvious strategy-proofness, simplicity, random priority

Suggested Citation

Pycia, Marek and Troyan, Peter, A Theory of Simplicity in Games and Mechanism Design (July 1, 2019). Available at SSRN: https://ssrn.com/abstract=2853563 or http://dx.doi.org/10.2139/ssrn.2853563

Marek Pycia (Contact Author)

University of Zurich ( email )

Rämistrasse 71
Zürich, CH-8006
Switzerland

Peter Troyan

University of Virginia (UVA) - Economics ( email )

1400 University Ave
Charlottesville, VA 22903
United States

HOME PAGE: http://people.virginia.edu/~pgt8y

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