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Mechanism Design With Ambiguous Communication Devices
Author(s) -
Bose Subir,
Renou Ludovic
Publication year - 2014
Publication title -
econometrica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 16.7
H-Index - 199
eISSN - 1468-0262
pISSN - 0012-9682
DOI - 10.3982/ecta10285
Subject(s) - mechanism (biology) , mechanism design , computer science , economics , mathematical economics , epistemology , philosophy
This paper considers mechanism design problems in environments with ambiguity‐sensitive individuals. The novel idea is to introduce ambiguity in mechanisms so as to exploit the ambiguity sensitivity of individuals. Deliberate engineering of ambiguity, through ambiguous mediated communication, can allow (partial) implementation of social choice functions that are not incentive compatible with respect to prior beliefs. We provide a complete characterization of social choice functions partially implementable by ambiguous mechanisms.