Information About Other Players in Mechanism Design

TL;DR

This paper explores how noisy signals about other agents' types can be used in mechanism design to eliminate undesirable equilibria and achieve full implementation of social choice functions.

Contribution

It introduces conditions under which additional information transforms non-fully implementable social choice functions into fully implementable ones.

Findings

Additional information can eliminate undesired equilibria.

Certain social choice functions become fully implementable with noisy signals.

Provides a sufficient condition for full implementability with information.

Abstract

We study mechanism design settings where the planner has an interest in agents receiving noisy signals about the types of other agents. We show that additional information about other agents can eliminate undesired equilibria, making it helpful to a planner interested in full implementation, designing a mechanism for which every equilibrium outcome is desirable. We provide a sufficient condition under which a social choice function that is not fully implementable when agents have no information about types of other agents can become fully implementable when agents have additional information.