@article{187b849097654a94b31edb7821976ad2,
title = "Robust implementation in direct mechanisms",
abstract = "A social choice function is robustly implementable if there is a mechanism under which the process of iteratively eliminating strictly dominated messages lead to outcomes that agree with the social choice function for all beliefs at every type profile. In an interdependent-value environment with single-crossing preferences, we identify a contraction property on the preferences which together with strict ex post incentive compatibility is sufficient to guarantee robust implementation in the direct mechanism. Strict ex post incentive compatibility and the contraction property are also necessary for robust implementation in any mechanism, including indirect ones. The contraction property requires that the interdependence is not too high. In a linear signal model, the contraction property is equivalent to an interdependence matrix having all eigenvalues smaller than one.",
author = "Dirk Bergemann and Stephen Morris",
note = "Funding Information: It follows that the strict inequality (A6) is reversed and this establishes the failure of the local contraction property of the social choice function. ‖ Acknowledgements. This research is supported by NSF Grants #CNS-0428422 and #SES-0518929. Morris is grateful for financial support from the John Simon Guggenheim Foundation and the Center for Advanced Studies in the Behavioral Sciences. We thank the editor, Andrea Prat, and three anonymous referees for their instructive remarks. We thank Sandeep Baliga, Federico Echenique, Donald Goldfarb, Matt Jackson, Jim Jordan, Vijay Krishna, Tom Palfrey, Ilya Segal, Daniel Spielman, Richard van Weelden and Meixia Zhang for helpful discussions; seminar audiences at Northwestern, Ohio State, Penn State, Pittsburgh, Stanford, UBC, UCLA and UC San Diego for comments; and Tomasz Strzalecki for pointing out an error in an earlier draft. This paper supersedes and extends results we first reported in Bergemann and Morris (2005a).",
year = "2009",
doi = "10.1111/j.1467-937X.2009.00553.x",
language = "English (US)",
volume = "76",
pages = "1175--1204",
journal = "Review of Economic Studies",
issn = "0034-6527",
publisher = "Oxford University Press",
number = "4",
}