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Articles (2011), Games and Economic Behavior, 73 (2), pp. 375-387

Equilibrium Rejection of a Mechanism


We study a mechanism design problem where the outside option is a default game. Players can reject the mechanism and play the default game non-cooperatively. We show that some allocation rules are implemented only when some players reject. Rejection is useful since it enables a player to signal private information. We establish a condition under which rejection is not required for implementation.

CELIK, G. and PETERS, M. (2011). Equilibrium Rejection of a Mechanism. Games and Economic Behavior, 73(2), pp. 375-387.