I argue for an alternative interpretation of King Solomon's problem in terms of one of the two claimants being “malicious”. A “malicious” claimant places no intrinsic value on the object but derives utility from depriving the rival claimant. This new interpretation permits a simpler solution than those considered in the literature; I derive a mechanism that induces truthful revelation where the equilibrium involves a single round of elimination of weakly dominated strategies, and no monetary transfers. I consider extensions which allow for the malicious claimant to also place some low but positive intrinsic valuation on the object; I also discuss the possibility of two-sided malice, and provide examples of several real-life contexts to which the mechanism or its extensions are applicable.
King Solomon's problem, Mechanism design, Malice, Elimination of dominated strategies
Journal of Economic Behavior and Organization
Reinterpreting King Solomon's Problem: Malice and Mechanism Design. (2014). Journal of Economic Behavior and Organization. 98, 125-132. Research Collection School Of Economics.
Available at: http://ink.library.smu.edu.sg/soe_research/1527
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