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Secure Implementation: Strategy-Proof Mechanisms Reconsidered

Saijo, Tatsuyoshi and Sjöström, Tomas and Yamato, Takehiko (2003) Secure Implementation: Strategy-Proof Mechanisms Reconsidered. Social Science Working Paper, 1174. California Institute of Technology , Pasadena, CA. (Unpublished)

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Strategy-proofness, requiring that truth-telling is a dominant strategy, is a standard concept in social choice theory. However, the concept of strategy-proofness has serious drawbacks. First, announcing one's true preference may not be a unique dominant strategy, and using the wrong dominant strategy may lead to the wrong outcome. Second, almost all strategy-proof mechanisms have a continuum of Nash equilibria, and most of which produce the wrong outcome. Third, experimental evidence shows that most of the strategy-proof mechanisms do not work well. We argue that a possible solution to this dilemma is to require double implementation in Nash equilibrium and in dominant strategies, which we call secure implementation. We characterize environments where secure implementation is possible, and compare it with dominant strategy implementation. An interesting example of secure implementation is a Groves mechanism when preferences are single-peaked.

Item Type:Report or Paper (Working Paper)
Additional Information:Revised version. Original dated to June 1998. Research was partially supported by the Grant in Aid for Scientific Research 08453001 of the Ministry of Education, Science and Culture in Japan, the Japan Securities Scholarship Foundation, and the Abe Fellowship. We thank Salvador Barberà, Ken Binmore, Shinji Ohseto, and Thomas Palfrey for useful comments. Published as Cason, T.N., Saijo, T., Sjöström, T., & Yamato, T. (2006). Secure implementation experiments: Do strategy-proof mechanisms really work?. Games and Economic Behavior, 57(2), 206-235.
Group:Social Science Working Papers
Funding AgencyGrant Number
Ministry of Education, Culture, Sports, Science and Technology (MEXT)08453001
Japan Securities Scholarship FoundationUNSPECIFIED
Series Name:Social Science Working Paper
Issue or Number:1174
Classification Code:JEL: C92, D71, D78, H41
Record Number:CaltechAUTHORS:20170731-164437007
Persistent URL:
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:79644
Deposited By: Jacquelyn Bussone
Deposited On:01 Aug 2017 20:37
Last Modified:03 Oct 2019 18:22

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