CaltechAUTHORS
  A Caltech Library Service

Pivot Mechanisms in Probability Revelation

Page, Talbot (1987) Pivot Mechanisms in Probability Revelation. Social Science Working Paper, 596. California Institute of Technology , Pasadena, CA. (Unpublished) https://resolver.caltech.edu/CaltechAUTHORS:20170913-170459300

[img] PDF (sswp 596 - Mar. 1987) - Submitted Version
See Usage Policy.

949Kb

Use this Persistent URL to link to this item: https://resolver.caltech.edu/CaltechAUTHORS:20170913-170459300

Abstract

The Groves mechanism and k^th price auctions are well-known examples of pivot mechanisms. In this paper an analogous pivot mechanism is defined for probability revelation and then the Bayesian equilibria are characterized for the three pivot mechanisms. The main result is that in Bayesian games with these pivot mechanisms, equilibria must satisfy a simple fixed point condition. The result does not require signal ordering properties and thus generalizes and simplifies results by Milgrom and others. When the fixed point is unique there is "no regret." The result also holds for games less structured than Bayesian games (where the common knowledge and consistency assumptions are relaxed). The pivot mechanism in probability revelation is shown to generalize and characterize proper scoring rules. The characterization yields an optimization of research incentives for proper scoring rules and suggests that under some conditions the new mechanisms, which are pivot mechanisms but not proper scoring rules, outperform proper scoring rules.


Item Type:Report or Paper (Discussion Paper)
Additional Information:This research was supported by the National Science Foundation and by the Mellon Foundation. I would like to thank John Ferejohn, Leonid Hurwicz, Lode Li, Richard McKelvey, Roger Noll, and Jennifer Reinganum for many helpful comments.
Group:Social Science Working Papers
Funders:
Funding AgencyGrant Number
NSFUNSPECIFIED
Andrew W. Mellon FoundationUNSPECIFIED
Series Name:Social Science Working Paper
Issue or Number:596
Record Number:CaltechAUTHORS:20170913-170459300
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20170913-170459300
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:81432
Collection:CaltechAUTHORS
Deposited By: Jacquelyn Bussone
Deposited On:15 Sep 2017 17:45
Last Modified:03 Oct 2019 18:42

Repository Staff Only: item control page