Publication Type
Working Paper
Version
publishedVersion
Publication Date
1-2022
Abstract
We study the design of mechanisms involving agents that have limited strategic sophistication. We define a mechanism to be simple if—given the assumed level of strategic sophistication—agents can determine their optimal strategy. We examine whether it is optimal for the mechanism designer who faces strategically unsophisticated agents to offer a simple mechanism. We show that when the designer uses a mechanism that is not simple, while she loses the ability to predict play, she may nevertheless be better off no matter how agents resolve their strategic confusion
Keywords
Simple mechanisms, complex mechanisms, robust mechanism design, dominant-strategy mechanisms, obviously strategy-proof mechanisms, strongly obviouslystrategy-proof mechanisms
Discipline
Economic Theory
Research Areas
Economic Theory
First Page
1
Last Page
51
Citation
LI, Jiangtao and DWORCZAK, Piotr.
Are simple mechanisms optimal when agents are unsophisticated?. (2022). 1-51.
Available at: https://ink.library.smu.edu.sg/soe_research/2547
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.