Mechanism design and intentions

Felix Bierbrauer and Nick Netzer

No 66, ECON - Working Papers from Department of Economics - University of Zurich

Abstract: We introduce intention-based social preferences into a mechanism design framework with independent private values and quasilinear payoffs. For the case where the designer has no information about the intensity of social preferences, we provide conditions under which mechanisms which have been designed under the assumption that agents are selfish can still be implemented. For the case where precise information about social preferences is available, we show that any tension between efficiency, incentive-compatibility, and voluntary participation may disappear. Impossibility results such as the one by Myerson and Satterthwaite (1983) are then turned into possibility results. We also provide a systematic account of the welfare implications of kindness sensations.

Keywords: Mechanism design; psychological games; social preferences; reciprocity (search for similar items in EconPapers)
JEL-codes: C70 C72 D02 D03 D82 D86 (search for similar items in EconPapers)
Date: 2012-03, Revised 2014-04
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-gth and nep-soc
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Citations: View citations in EconPapers (14)

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Related works:
Journal Article: Mechanism design and intentions (2016)
Working Paper: Mechanism Design and Intentions (2016)
Working Paper: Mechanism Design and Intentions (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:zur:econwp:066

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