We introduce intention-based social preferences into a Bayesian mechanism design framework. We first show that, under common knowledge of social preferences, any tension between material efficiency, incentive compatibility, and voluntary participation can be resolved. Hence, famous impossibility...

We consider robust virtual implementation, where robustness is the requirement that implementation succeed in all type spaces consistent with a given payoff type space as well as with a given space of first-order beliefs about the other agents’ payoff types. This last bit, which constitutes...

Suppose that the goals of a society can be summarized in a social choice rule, i.e., a mapping from relevant underlying parameters to final outcomes. Typically, the underlying parameters (e.g., individual preferences) are private information to the agents in society. The implementation problem...

Models of choice where agents see others as less sophisticated than themselves have significantly different, sometimes more accurate, predictions in games than does Nash equilibrium. When it comes to mechanism design, however, they turn out to have surprisingly similar implications. This paper...

We consider mechanism design in contexts in which agents exhibit bounded depth of reasoning (level k) instead of rational expectations. We use simple direct mechanisms, in which agents report only first-order beliefs. While level 0 agents are assumed to be truth tellers, level k agents...

Implementation in iteratively undominated strategies relies on permissive conditions. However, for the sufficiency results available, authors have relied on assumptions that amount to quasilinear preferences on a numeraire. We uncover a new necessary condition that implies that such assumptions...

Die EU hat durch die Zinsenrichtlinie einerseits eindeutig von einer Politik, die auf einem Vertrauen gegenüber dem Bürger und einer gewissen Selbstbestimmung beruhte, zu einer Vorgehensweise gewechselt die durch Misstrauen und Kontrolle geprägt ist. Andererseits erscheinen die Regelungen der...

An important result in convex analysis is the duality between a closed convex set and its support function. We exploit this duality to develop a novel geometric approach to mechanism design. For a general class of social choice problems we characterize the feasible set, which is closed and...

The endowment and attachment effect are empirically well-documented in bilateral trade situations. Yet, the theoretical literature has so far failed to formally identify these effects. We fill this gap by introducing expectations-based loss aversion, which can explain both effects, into the...

The endowment and attachment effect are empirically well-documented in bilateral trade situations. Yet, the theoretical literature has so far failed to formally identify these effects. We fill this gap by introducing expectations-based loss aversion, which can explain both effects, into the...