Publication Type

Conference Proceeding Article

Version

publishedVersion

Publication Date

7-2021

Abstract

We study the design of mechanisms involving agents that have limited strategic sophistication. The literature has identified several notions of simple mechanisms in which agents can determine their optimal strategy even if they lack cognitive skills such as predicting other agents' strategies (strategy-proof mechanisms), contingent reasoning (obviously strategy-proof mechanisms), or foresight (strongly obviously strategy-proof mechanisms). We examine whether it is optimal for the mechanism designer who faces strategically unsophisticated agents to offer a mechanism from the corresponding class of simple mechanisms. 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, Strategic confusion, Robustness

Discipline

Economic Theory

Research Areas

Economic Theory

Publication

Proceedings of the 22nd ACM Conference on Economics and Computation (EC’21), Budapest Hungary, 2021 July 18-23

First Page

685

Last Page

686

ISBN

9781450385541

Identifier

10.1145/3465456.3467606

Publisher

ACM

City or Country

Budapest Hungary

Download

Share

COinS