2020/11/16 by Haoyang Wu, Wu, Haoyang
Decision Sciences · Economics, Econometrics and Finance · Social Sciences · #Auction Theory and Applications #Computer Science and Game Theory (cs.GT) #Experimental Behavioral Economics Studies #FOS: Computer and information sciences #Game Theory and Applications #Game Theory and Voting Systems #Law, Economics, and Judicial Systems
paper · pdf · doi:10.48550/arxiv.2011.07878
openalex publication_date 2020/11/16 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
In mechanism design theory, a designer would like to implement a social\nchoice function which specifies her favorite outcome for each possible profile\nof agents' private types. The revelation principle asserts that if a social\nchoice function can be implemented by a mechanism in equilibrium, then there\nexists a direct mechanism that can truthfully implement it.\n This paper aims to propose a failure of the revelation principle. We point\nout that in any game the format of each agent's strategy is either an\ninformational message or a realistic action, and the action format is very\ncommon in many practical cases. The main result is that: For any given social\nchoice function, if the mechanism which implements it has action-format\nstrategies, then "\honest and obedient" will no longer be the Bayesian\nNash equilibrium of the direct mechanism, actually the social choice function\ncan only be implemented "\dishonestly and disobediently" in Bayesian Nash\nequilibrium by the direct mechanism. Consequently, the revelation principle\nfails when the format of each agent's strategy is an action.\n