Interim strategy-proof mechanisms

• Department of Economics

This event features a discussion with Tangren Feng (Bocconi University).

Interim strategy-proofness (ISP) is a mechanism design criterion that extends strategyproofness to environments with interdependent values. It requires that each agent have an interim dominant strategy — one that is optimal against any strategies of others, given her beliefs about their types. We characterise ISP mechanisms for binary collective choices without transfers: a mechanism is ISP if and only if it satisfies Ordinality, Monotonicity, and a novel condition, Limited Outcome Externality (LOE).

LOE bounds how much an agent’s impact on the outcome can vary with others’ actions, with the permissible variation inversely related to the magnitude of informational externalities faced by her in the environment. We apply the characterisation to the jury model and identify optimal ISP voting rules. Under ISP, a weak Condorcet Jury Theorem holds, whereas the strong version fails.

Co-author: Qinggong Wu