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Mechanism Design and Communication Networks

Version 2 2020-04-30, 16:07
Version 1 2011-10-05, 08:42
journal contribution
posted on 2020-04-30, 16:07 authored by Ludovic Renou, Tristan Tomala
This paper studies a mechanism design model where the players and the designer are nodes in a communication network. We characterize the communication networks (directed graphs) for which, in any environment (utilities and beliefs), every incentive compatible social choice function is partially implementable. We show that any incentive compatible social choice function is implementable on a given communication network, in all environments with either common independent beliefs and private values or a worst outcome, if and only if the network is strongly connected and weakly 2-connected. A network is strongly connected if for each player, there exists a directed path to the designer. It is weakly 2-connected if each player is either directly connected to the designer or indirectly connected to the designer through two disjoint paths, not necessarily directed. We couple encryption techniques together with appropriate incentives to secure the transmission of each player’s private information to the designer.

Funding

Ludovic Renou thanks the hospitality of Fuqua Business School at Duke University. Tristan Tomala gratefully acknowledges the support of the HEC foundation.

History

Citation

Theoretical Economics, Volume 7, Issue 3, September 2012, Pages 489-533

Version

  • VoR (Version of Record)

Published in

Theoretical Economics

Volume

7

Issue

3

Pagination

489-533

Publisher

Econometric Society

issn

1555-7561

eissn

1933-6837

Acceptance date

2011-08-02

Copyright date

2011

Available date

2011-08-02

Publisher version

https://onlinelibrary.wiley.com/doi/abs/10.3982/TE921

Notes

Theoretical Economics is an open access journal. All articles from this journal are freely available from the journal's website.

Language

en

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