A solution to the two-person implementation problem

Jean-François Laslier (1, 2) , Matias Nunez (3, 4) , M Remzi Sanver (5)

1 PJSE - Paris Jourdan Sciences Economiques
2 PSE - Paris School of Economics
3 CECO - Laboratoire d'économétrie de l'École polytechnique
4 CREST - Centre de Recherche en Economie et Statistique [Bruz]
5 LAMSADE - Laboratoire d'analyse et modélisation de systèmes pour l'aide à la décision

We propose a solution to the classical problem of Hurwicz and Schmeidler [1978] and Maskin [1999] according to which no Pareto efficient rule is Nash implementable. To this end, we consider implementation through mechanisms that are deterministic-in-equilibrium while lotteries are allowed off-equilibrium. We show that there are Pareto efficient rules which are implementable and that any such rule is implementable through some simple veto mechanism. Importantly , neither completeness nor transitivity of the preferences over lotteries are required to achieve implementation.

Domaines: Economies et finances

Jean-François Laslier, Matias Nunez, M Remzi Sanver. A solution to the two-person implementation problem. 2019. ⟨halshs-02173504v1⟩