2018/12/03 by Tilman Börgers, Jiangtao Li, Borgers, Tilman +1 · 1 citation
Decision Sciences · Economics, Econometrics and Finance · #FOS: Economics and business #Game Theory and Applications #Game Theory and Voting Systems #Merger and Competition Analysis #Theoretical Economics (econ.TH)
paper · pdf · doi:10.48550/arxiv.1812.00849
openalex publication_date 2018/12/03 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
We define and investigate a property of mechanisms that we call "strategic simplicity," and that is meant to capture the idea that, in strategically simple mechanisms, strategic choices require limited strategic sophistication. We define a mechanism to be strategically simple if choices can be based on first-order beliefs about the other agents' preferences and first-order certainty about the other agents' rationality alone, and there is no need for agents to form higher-order beliefs, because such beliefs are irrelevant to the optimal strategies. All dominant strategy mechanisms are strategically simple. But many more mechanisms are strategically simple. In particular, strategically simple mechanisms may be more flexible than dominant strategy mechanisms in the bilateral trade problem and the voting problem.