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Frontiers of Economics in China

ISSN 1673-3444

ISSN 1673-3568(Online)

CN 11-5744/F

Postal Subscription Code 80-978

Front Econ Chin    2013, Vol. 8 Issue (1) : 1-18    https://doi.org/10.3868/s060-002-013-0001-3
research-article |
A Characterization for Dominant Strategy Implementation
Jesse A. Schwartz1(), Quan Wen2()
1. Department of Economics, Finance, and Quantitative Analysis, Kennesaw State University, Kennesaw, GA 30144, USA; 2. Department of Economics, Vanderbilt University, Nashville, TN 37235-1819, USA
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Abstract

We introduce a perfect price discriminating mechanism for allocation problems with private information. A perfect price discriminating mechanism treats a seller, for example, as a perfect price discriminating monopolist who faces a price schedule that does not depend on her report. In any perfect price discriminating mechanism, every player has a dominant strategy to truthfully report her private information.We establish a characterization for dominant strategy implementation: Any outcome that can be dominant strategy implemented can also be dominant strategy implemented using a perfect price discriminating mechanism. We apply this characterization to derive the optimal, budget-balanced, dominant strategy mechanisms for public good provision and bilateral bargaining.

Keywords perfect price discriminating (PPD)      dominant strategy implementation      Vickrey-Clarke-Groves mechanisms      public good provision      bilateral bargaining     
Corresponding Authors: Jesse A. Schwartz,Email:jschwar7@kennesaw.edu; Quan Wen,Email:quan.wen@vanderbilt.edu   
Issue Date: 05 March 2013
 Cite this article:   
Jesse A. Schwartz,Quan Wen. A Characterization for Dominant Strategy Implementation[J]. Front Econ Chin, 2013, 8(1): 1-18.
 URL:  
http://academic.hep.com.cn/fec/EN/10.3868/s060-002-013-0001-3
http://academic.hep.com.cn/fec/EN/Y2013/V8/I1/1
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