Foundations and Trends® in Microeconomics > Vol 8 > Issue 3

An Introduction to Robust Mechanism Design

Dirk Bergemann, Department of Economics, Yale University, USA, dirk.bergemann@yale.edu Stephen Morris, Department of Economics, Princeton University, USA, smorris@princeton.edu
 
Suggested Citation
Dirk Bergemann and Stephen Morris (2013), "An Introduction to Robust Mechanism Design", Foundations and Trends® in Microeconomics: Vol. 8: No. 3, pp 169-230. http://dx.doi.org/10.1561/0700000057

Published: 22 Feb 2013
© 2013 D. Bergemann and S. Morris
 
Subjects
Industrial Organization,  Economic Theory
 
Keywords
C79 Game Theory and Bargaining TheoryD82 Mechanism Design
Mechanism DesignRobust Mechanism DesignCommon KnowledgeUniversal Type SpaceInterim EquilibriumEx Post EquilibriumDominant StrategiesRationalizabilityPartial ImplementationFull ImplementationRobust Implementation
 

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In this article:
1 Introduction
2 Leading Example: Allocating a Private Good with Interdependent Values
3 Type Spaces
4 Robust Foundations for Dominant and Ex Post Incentive Compatibility
5 Full Implementation
6 Open Issues
References

Abstract

This essay provides an introduction to our recent work on robust mechanism design. The objective is to provide an overview of the research agenda and its results. We present the main results and illustrate many of them in terms of a common and canonical example, the single unit auction with interdependent values. In addition, we provide an extended discussion about the role of alternative assumptions about type spaces in our work, and the literature at large, in order to explain the common logic of the informational robustness approach that unifies the work.

DOI:10.1561/0700000057
ISBN: 978-1-60198-644-3
61 pp. $60.00
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ISBN: 978-1-60198-645-0
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Table of contents:
Introduction
Leading Example: Allocating a Private Good with Interdependent Values
Type Spaces
Robust Foundations for Dominant and Ex Post Incentive Compatibility
Full Implementation
Open Issues
References

An Introduction into Robust Mechanism Design

An Introduction to Robust Mechanism Design brings together and presents a number of results on the theme of robust mechanism design and robust implementation that the authors have been working on in the past decade. This work examines the implications of relaxing the strong informational assumptions that drive much of the mechanism design literature. The objective is to provide the reader with an overview of the research agenda and present the main results of this research by illustrating it in terms of a common and canonical example – the single unit auction with interdependent values. In addition, the monograph includes an extended discussion on the role of alternative assumptions about type spaces in the authors' work. It also discusses the literature to explain the common logic of the informational robustness approach that unifies the work that is surveyed in this monograph.

 
MIC-057