Ex-post implementation with social preferences

Abstract

The current literature on mechanism design in models with social preferences discusses social-preference-robust mechanisms, i.e., mechanisms that are implementable in any environment with social preferences. The literature also discusses payoff-information-robust mechanisms, i.e., mechanisms that are implementable for any belief and higher-order beliefs of the agents about the payoff types of the other agents. In the present paper, I address the question of whether deterministic mechanisms that are robust in both of these dimensions exist. I consider environments where each agent holds private information about his personal payoff and about the existence and extent of his social preferences. In such environments, a mechanism is robust in both dimensions only if it is ex-post implementable, i.e., only if incentive compatibility holds for every realization of payoff signals and for every realization of social preferences. I show that ex-post implementation of deterministic mechanisms is impossible in such environments; i.e., deterministic mechanisms that are both social-preference-robust and payoff-information-robust do not exist.

Efficient Incentives with Social Preferences

“…Bergemann and Morris (2005) have proposed ex-post implementation for environments with interdependent utilities, requiring that truthful revelation of types constitutes a Nash equilibrium. Jehiel et al (2006) show that ex-post implementation is 'generically' not feasible in the presence of informational externalities; a finding extended by Zik (2021) to our present context.…”

Efficient incentives with social preferences

“…have proposed ex post implementation for environments with interdependent utilities, requiring that truthful revelation of types constitutes a Nash equilibrium. However,Jehiel, Meyer-ter Vehn, Moldovanu, and Zame (2006) show that ex post implementation is "generically" not feasible in the presence of informational externalities, a finding extended byZik (2021) to our present context.…”