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On the Equivalence of Bayesian and Dominant Strategy Implementation
Author(s) -
Gershkov Alex,
Goeree Jacob K.,
Kushnir Alexey,
Moldovanu Benny,
Shi Xianwen
Publication year - 2013
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/ecta10592
Subject(s) - interim , equivalence (formal languages) , incentive compatibility , social choice theory , mathematical economics , incentive , economics , bayesian probability , microeconomics , expected utility hypothesis , strategic dominance , ex ante , mechanism design , extension (predicate logic) , econometrics , mathematics , computer science , discrete mathematics , political science , statistics , programming language , law , macroeconomics
We consider a standard social choice environment with linear utilities and independent, one‐dimensional, private types. We prove that for any Bayesian incentive compatible mechanism there exists an equivalent dominant strategy incentive compatible mechanism that delivers the same interim expected utilities for all agents and the same ex ante expected social surplus. The short proof is based on an extension of an elegant result due to Gutmann, Kemperman, Reeds, and Shepp (1991). We also show that the equivalence between Bayesian and dominant strategy implementation generally breaks down when the main assumptions underlying the social choice model are relaxed or when the equivalence concept is strengthened to apply to interim expected allocations.