Strategically simple Mechanisms
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Abstract

We define and investigate a property of mechanisms that we call “strategic simplicity,” and that is meant to capture the idea that, in strategically simple mechanisms, strategic choices are easy. We define a mechanism to be strategically simple if optimal strategic choices can be based on first-order beliefs alone, and there is no need for agents to form higher-order beliefs because such beliefs are irrelevant to agents’ optimal choices. In many mechanisms, agents who want to make an optimal choice cannot avoid having to form higher-order beliefs. But in some mechanisms, there is no need for this. These are the mechanisms that we investigate and characterize in this paper. All dominant strategy mechanisms are strategically simple. But many more mechanisms are strategically simple. In particular, strategically simple mechanisms may be more flexible than dominant strategy mechanisms in examples such as the voting problem and the bilateral trade problem.

Read the full paper at the following link:

www-personal.umich.edu/~tborgers/StrategicallySimpleMechanisms.pdf
Date: 4 May 2018, 14:15
Venue: Manor Road Building, Manor Road OX1 3UQ
Venue Details: IT Room
Speaker: Tilman Borgers (University of Michigan)
Organising department: Department of Economics
Organisers: Anne Pouliquen (University of Oxford), Erin Saunders (University of Oxford)
Part of: Nuffield Economic Theory Seminar
Booking required?: Not required
Audience: Members of the University only
Editors: Erin Saunders, Anne Pouliquen, Melis Clark