Dynamic Stability of Nash-Efficient Public Goods Mechanisms: Reconciling Theory and Experiments

Chen, Yan

doi:10.1007/0-387-24243-0_10

Cited by 5 publications

(5 citation statements)

References 33 publications

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“…One's contribution to the other group member's activity B was calculated by multiplying one's rate of support times the other group member's contribution to activity A. This corresponds to the term s i g j in equation (4). As in the previous experiment the same table as in the control game could be used to work out the income from activity B for each level of the (total) contribution to B.…”

Section: Experimental Designmentioning

confidence: 99%

Relative performance of two simple incentive mechanisms in a public goods experiment

Bracht

Figuières

Ratto

2008

Journal of Public Economics

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This paper reports on experiments designed to compare the performance of two incentive mechanisms in public goods problems. One mechanism rewards and p enalizes deviations from the average contribution of the other agents to the public good (tax-subsidy mechanism). Another mechanism allows agents to subsidize the other agents'contributions (compensation mechanism). It is found that both mechanisms lead to an increase in the level of contribution to the public good. The tax-subsidy mechanism allows for good point and interval prediction of the average level of contribution. The compensation mechanism allows for less reliable prediction of the average level of contributions.

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Section: Experimental Designmentioning

confidence: 99%

Relative performance of two simple incentive mechanisms in a public goods experiment

Bracht

Figuières

Ratto

2008

Journal of Public Economics

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“…for all i, j ∈ N and t > k ∈ N. Thus, agents best respond to the belief that the average message of the previous k periods will be played in the current period 9 . Note that ψ i j ∈ M j by the convexity of M j .…”

Section: A Best Response Model Of Behaviormentioning

confidence: 99%

Learning dynamics for mechanism design: An experimental comparison of public goods mechanisms

Healy

2006

Journal of Economic Theory

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In a repeated-interaction public goods economy, dynamic behavior may affect the efficiency of various mechanisms thought to be efficient in one-shot games. Inspired by results obtained in previous experiments, the current paper proposes a simple best response model in which players' beliefs are functions of previous strategy profiles. The predictions of the model are found to be highly consistent with new experimental data from five mechanisms with various types of equilibria. Interesting properties of a 2parameter Vickrey-Clarke-Groves mechanism help to draw out this result. The simplicity of the model makes it useful in predicting dynamic stability of other mechanisms.

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“…Recently, Chen (2005) and Chen and Gazzale (2004) study whether mechanisms based on supermodularity conditions achieve convergence to Nash equilibria through learning. They find supermodular mechanisms converge significantly better than non-supermodular mechanisms in experiments.…”

Section: Resultsmentioning

confidence: 99%

“…Recently, Chen (2005) argued that mechanisms used for Nash implementation might perform better if they induce supermodular games, because supermodularity guarantees convergence of standard learning processes. On the other hand, supermodularity is not a necessary condition for convergence of these learning processes.…”

Section: Introductionmentioning

confidence: 99%

Secure implementation experiments: Do strategy-proof mechanisms really work?

Cason

Saijo

Sjöström

et al. 2006

Games and Economic Behavior

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Strategy-proofness, requiring that truth-telling is a dominant strategy, is a standard concept used in social choice theory. Saijo, Sjöström and Yamato [Saijo, T., Sjöström, T., Yamato, T., 2003. Secure implementation: Strategy-proof mechanisms reconsidered. Working paper 4-03-1. Department of Economics, Pennsylvania State University] argue that this concept has serious drawbacks. In particular, many strategyproof mechanisms have a continuum of Nash equilibria, including equilibria other than dominant strategy equilibria. For only a subset of strategy-proof mechanisms do the set of Nash equilibria and the set of dominant strategy equilibria coincide. For example, this double coincidence occurs in the Groves mechanism when preferences are single-peaked. We report experiments using two strategy-proof mechanisms. One of them has a large number of Nash equilibria, but the other has a unique Nash equilibrium. We found clear differences in the rate of dominant strategy play between the two.

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Dynamic Stability of Nash-Efficient Public Goods Mechanisms: Reconciling Theory and Experiments

Cited by 5 publications

References 33 publications

Relative performance of two simple incentive mechanisms in a public goods experiment

Relative performance of two simple incentive mechanisms in a public goods experiment

Learning dynamics for mechanism design: An experimental comparison of public goods mechanisms

Secure implementation experiments: Do strategy-proof mechanisms really work?

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