Arbeitspapier
Mechanism design with level-k types: Theory and an application to bilateral trade
This paper studies mechanism design under the level-k solution concept. The first result gives a general necessary condition for a social choice rule to be level-k implementable. In some environments, this necessary condition is equivalent to Bayesian incentive compatibility, making level-k implementation more restrictive than Bayesian implementation. The second result shows that this is not a general implication. In the bilateral trade environment ex post efficient trade is always possible under level-k implementation. Further, ex post efficient trade is possible in a mechanism that is robust to different specifications of beliefs about the levels of reasoning of others and to any specification of beliefs about payoffs.
- Language
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Englisch
- Bibliographic citation
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Series: WZB Discussion Paper ; No. SP II 2017-303
- Classification
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Wirtschaft
- Event
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Geistige Schöpfung
- (who)
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Kneeland, Terri
- Event
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Veröffentlichung
- (who)
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Wissenschaftszentrum Berlin für Sozialforschung (WZB)
- (where)
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Berlin
- (when)
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2017
- Handle
- Last update
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10.03.2025, 11:41 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Kneeland, Terri
- Wissenschaftszentrum Berlin für Sozialforschung (WZB)
Time of origin
- 2017
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