Publication Type
Journal Article
Version
publishedVersion
Publication Date
11-2022
Abstract
The theory of full implementation has been criticized for using integer/modulo games, which admit no equilibrium (Jackson (1992)). To address the critique, we revisit the classical Nash implementation problem due to Maskin (1977, 1999) but allow for the use of lotteries and monetary transfers as in Abreu and Matsushima (1992, 1994). We unify the two well-established but somewhat orthogonal approaches in full implementation theory. We show that Maskin monotonicity is a necessary and sufficient condition for (exact) mixed-strategy Nash implementation by a finite mechanism. In contrast to previous papers, our approach possesses the following features: finite mechanisms (with no integer or modulo game) are used; mixed strategies are handled explicitly; neither undesirable outcomes nor transfers occur in equilibrium; the size of transfers can be made arbitrarily small; and our mechanism is robust to information perturbations.
Keywords
Complete information, full implementation, information perturbations, Maskin monotonicity, mixed-strategy Nash equilibrium, social choice function.
Discipline
Economic Theory
Research Areas
Economic Theory
Publication
Theoretical Economics
Volume
17
Issue
4
First Page
1683
Last Page
1717
ISSN
1933-6837
Identifier
10.3982/TE4255
Publisher
Econometric Society
Citation
CHEN, Yi-Chun; KUNIMOTO, Takashi; SUN, Yifei; and XIONG, Siyang.
Maskin meets Abreu and Matsushima. (2022). Theoretical Economics. 17, (4), 1683-1717.
Available at: https://ink.library.smu.edu.sg/soe_research/2655
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
http://doi.org/10.3982/TE4255