Hard Evidence and Mechanism Design

UCSD, Economics Working Paper No. 2002-16

17 Pages Posted: 14 Nov 2002

See all articles by Joel Watson

Joel Watson

University of California, San Diego (UCSD) - Department of Economics

Jesse Bull

Florida International University (FIU) - Department of Economics

Date Written: September 2002

Abstract

We show how hard evidence can be incorporated into the mechanism-design framework. We provide a link between real evidence and abstract declarations, which clarifies when the abstract-declaration environment, which was first studied in Green and Laffont's (1986) "limited verifiability" analysis, has an intuitive interpretation. We find that the condition of evidentiary normality - under which, for each party, there is a one-to-one mapping between states and report/evidence pairs that holds across all implementation exercises - justifies studying the abstract-declaration model. However, without evidentiary normality, it is not appropriate to focus on static mechanisms.

JEL Classification: C70, D74, K10

Suggested Citation

Watson, Joel and Bull, Jesse, Hard Evidence and Mechanism Design (September 2002). UCSD, Economics Working Paper No. 2002-16, Available at SSRN: https://ssrn.com/abstract=340702 or http://dx.doi.org/10.2139/ssrn.340702

Joel Watson (Contact Author)

University of California, San Diego (UCSD) - Department of Economics ( email )

9500 Gilman Drive
La Jolla, CA 92093-0508
United States
858-534-6132 (Phone)
619-534-7040 (Fax)

Jesse Bull

Florida International University (FIU) - Department of Economics ( email )

Miami, FL 33199
United States

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