Secure implementation experiments

Do strategy-proof mechanisms really work?

Timothy N. Cason, Tatsuyoshi Saijo, John Sjostrom, Takehiko Yamato

Research output: Contribution to journalArticle

30 Citations (Scopus)

Abstract

Strategy-proofness, requiring that truth-telling is a dominant strategy, is a standard concept used in social choice theory. Saijo, Sjöström and Yamato [Saijo, T., Sjöström, T., Yamato, T., 2003. Secure implementation: Strategy-proof mechanisms reconsidered. Working paper 4-03-1. Department of Economics, Pennsylvania State University] argue that this concept has serious drawbacks. In particular, many strategy-proof mechanisms have a continuum of Nash equilibria, including equilibria other than dominant strategy equilibria. For only a subset of strategy-proof mechanisms do the set of Nash equilibria and the set of dominant strategy equilibria coincide. For example, this double coincidence occurs in the Groves mechanism when preferences are single-peaked. We report experiments using two strategy-proof mechanisms. One of them has a large number of Nash equilibria, but the other has a unique Nash equilibrium. We found clear differences in the rate of dominant strategy play between the two.

Original languageEnglish (US)
Pages (from-to)206-235
Number of pages30
JournalGames and Economic Behavior
Volume57
Issue number2
DOIs
StatePublished - Nov 1 2006

Fingerprint

Strategy-proof
Nash equilibrium
Experiment
Dominant strategy
Economics
Strategy-proofness
Social choice theory
Truth-telling
Groves mechanisms

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

Keywords

  • Experiment
  • Groves-Clarke
  • Laboratory
  • Learning
  • Pivotal
  • Secure implementation

Cite this

Cason, Timothy N. ; Saijo, Tatsuyoshi ; Sjostrom, John ; Yamato, Takehiko. / Secure implementation experiments : Do strategy-proof mechanisms really work?. In: Games and Economic Behavior. 2006 ; Vol. 57, No. 2. pp. 206-235.
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Secure implementation experiments : Do strategy-proof mechanisms really work? / Cason, Timothy N.; Saijo, Tatsuyoshi; Sjostrom, John; Yamato, Takehiko.

In: Games and Economic Behavior, Vol. 57, No. 2, 01.11.2006, p. 206-235.

Research output: Contribution to journalArticle

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