Nash implementation without no-veto power

Jean Pierre Benoît, Efe A. Ok

    Research output: Contribution to journalArticle

    Abstract

    For a society that consists of at least three individuals, we show that a social choice rule is Maskin monotonic if and only if it is Nash implementable by means of a mechanism that is stochastic or a mechanism that contains (arbitrary) awards. In equilibrium, the mechanisms do not have any stochastic elements and do not involve any awards. Thus, loosely speaking, one can drop the no-veto power postulate from Maskin's classic theorem on Nash implementability, provided that the notion of a mechanism is suitably generalized, thereby narrowing the gap between the properties of Maskin monotonicity and Nash implementability. Moreover, using the standard notion of a mechanism, we prove that Nash implementability is equivalent to Maskin monotonicity with renegotiation: this is a pure improvement over a well-known result of Maskin and Moore [Maskin, E., Moore, J., 1999. Implementation and renegotiation, Rev. Econ. Studies 66, 39-56].

    Original languageEnglish (US)
    Pages (from-to)51-67
    Number of pages17
    JournalGames and Economic Behavior
    Volume64
    Issue number1
    DOIs
    StatePublished - Sep 2008

    ASJC Scopus subject areas

    • Finance
    • Economics and Econometrics

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