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

Copyright Owner and License

Authors

Additional URL

http://doi.org/10.3982/TE4255

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