Publication Type
Journal Article
Version
publishedVersion
Publication Date
7-2019
Abstract
We consider a general social choice environment that has multiple agents, a finite set of alternatives, independent types, and atomless type distribution. We show that for any Bayesian incentive compatible mechanism, there exists an equivalent deterministic mechanism that (1) is Bayesian incentive compatible; (2) delivers the same interim expected allocation probabilities and the same interim expected utilities for all agents; and (3) delivers the same ex ante expected social surplus. This result holds in settings with a rich class of utility functions, multidimensional types, interdependent valuations, and in settings without monetary transfers. To prove our result, we develop a novel methodology of mutual purification, and establish its link with the mechanism design literature.
Discipline
Economic Theory
Research Areas
Economic Theory
Publication
Econometrica
Volume
87
Issue
4
First Page
1367
Last Page
1390
ISSN
0012-9682
Identifier
10.3982/ECTA14698
Publisher
Econometric Society
Citation
CHEN, Yi-Chun; LI, Jiangtao; LI, Jiangtao; and SUN, Yeneng.
Equivalence of stochastic and deterministic mechanisms. (2019). Econometrica. 87, (4), 1367-1390.
Available at: https://ink.library.smu.edu.sg/soe_research/2302
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.3982/ECTA14698