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Revelation principle

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The revelation principle is a fundamental principle in mechanism design. It states that if a social choice function can be implemented by an arbitrary mechanism (i.e. if that mechanism has an equilibrium outcome that corresponds to the outcome of the social choice function), then the same function can be implemented by an incentive-compatible-direct-mechanism (i.e. in which players truthfully report type) with the same equilibrium outcome (payoffs).: 224–225 In mechanism design, the revelation principle is of utmost importance in finding solutions. The researcher need only look at the set of equilibria characterized by incentive compatibility. That is, if the mechanism designer wants to implement some outcome or property, they can restrict their search to mechanisms in which agents are willing to reveal their private information to the mechanism designer that has that outcome or property. If no such direct and truthful mechanism exists, no mechanism can implement this outcome/property by contraposition. By narrowing the area needed to be searched, the problem of finding a mechanism becomes much easier.

Revelation principle - Wikipedia Jump to content From Wikipedia, the free encyclopedia Principle in economics and game theory This article has multiple issues. Please help improve it or discuss these issues on the talk page . ( Learn how and when to remove these messages ) This article needs editing to comply with Wikipedia's Manual of Style . Please help improve the content . ( April 2016 ) ( Learn how and when to remove this message ) This article needs more citations . Please help improve this article by adding citations to reliable sources . Unsourced material may be challenged and removed

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