Level-k mechanism design

Arbeitspapier

Models of choice where agents see others as less sophisticated than themselves have significantly different, sometimes more accurate, predictions in games than does Nash equilibrium. When it comes to mechanism design, however, they turn out to have surprisingly similar implications. This paper provides tight necessary and sufficient conditions for implementation with bounded depth of reasoning, discussing the role and implications of different behavioral anchors. The central condition slightly strenghthens standard incentive constraints, and we term it strict-if-responsive Bayesian incentive compatibility (SIRBIC).

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2016-6

Classification and Topics

• Classification: Wirtschaft ; Noncooperative Games ; Analysis of Collective Decision-Making: General ; Positive Analysis of Policy Formulation and Implementation ; Asymmetric and Private Information; Mechanism Design
• Subject: mechanism design ; bounded rationality ; level k reasoning ; revelation principle ; incentive compatibility

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): De Clippel, Geoffroy ; Saran, Rene ; Serrano, Roberto
• Event: Veröffentlichung
• (who): Brown University, Department of Economics
• (where): Providence, RI
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/162756
• Last update: 10.03.2025, 11:44 AM CET