Hard Evidence and Mechanism Design
- Author(s): Bull, J;
- Watson, J
- et al.
Published Web Locationhttp://www.sciencedirect.com/science?_ob=MImg&_imagekey=B6WFW-4JRVB8V-3-1&_cdi=6805&_user=4429&_orig=browse&_coverDate=01%2F31%2F2007&_sk=999419998&view=c&wchp=dGLzVzz-zSkWW&md5=7ed70aa4eb8d8d7495a863ecf2e8d79c&ie=/sdarticle.pdf
This paper addresses how hard evidence can be incorporated into mechanism-design analysis. Two classes of models are compared: (a) ones in which evidentiary decisions are accounted for explicitly, and (b) ones in which the players make abstract declarations of their types. Conditions are provided under which versions of these models are equivalent. The paper also addresses whether dynamic mechanisms are required for Nash implementation in settings with hard evidence. The paper shows that static mechanisms suffice in the setting of "evidentiary normality" and that, in a more general environment, one can restrict attention to a class of three-stage dynamic mechanisms.