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  3. American Economic Review
  4. May 2012
  5. Robustly Ranking Mechanisms

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Robustly Ranking Mechanisms

  • Tilman Börgers
  • Doug Smith
American Economic Review
vol. 102, no. 3, May 2012
(pp. 325–29)
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Abstract

For a mechanism designer with an objective such as welfare we propose a method for robustly ranking mechanisms. The method is based on eliminating weakly dominated strategies only, and thus does not require any assumptions about agents' beliefs about each other except full support. We illustrate the usefulness of this method in two examples: bilateral trading and voting. In both examples we show that there are mechanisms that are ranked by our method above dominant strategy mechanisms. These examples question the literature's focus on dominant strategy mechanisms in cases when such mechanisms yield undesirable outcomes.

Citation

Börgers, Tilman, and Doug Smith. 2012. "Robustly Ranking Mechanisms." American Economic Review 102 (3): 325–29. DOI: 10.1257/aer.102.3.325

JEL Classification

  • D82 Asymmetric and Private Information