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Ulric B. and Evelyn L. Bray Social Sciences Seminar

Wednesday, March 13, 2019
4:00pm to 5:00pm
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Baxter B125
Strategically Simple Mechanisms
Tilman Börgers, Professor, Department of Economics, University of Michigan,

Abstract: 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, be-cause 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.

For more information, please contact Mary Martin by phone at 626-395-5884 or by email at [email protected] or visit the full paper, "Strategically Simple Mechanisms.".