Strategically Robust Implementation

• Authors: Antonio Penta.
• BSE Working Paper: 112339 | September 24
• Keywords: robustness , full implementation , Bayes Nash equilibrium , interim correlated rationalizability
• JEL codes: C79, D82
• robustness
• full implementation
• Bayes Nash equilibrium
• interim correlated rationalizability

We put forward a notion of implementation for Social Choice Functions (SCF) that is robust with respect to the solution concept used to model agents’ strategic interaction. Formally, we define implementation in Interim Correlated Rationalizability and its Refinements (ICRR implementation) as implementation in Interim Correlated Rationalizability (ICR), with the extra requirement that it be achieved by a mechanism in which all selections from ICR have the best-reply property. We provide a tight characterization in terms of a novel notion of monotonicity, Iterative Interim Monotonicity (IIM). Our condition relates the possibility of ICRR-implementation with a specific way in which the SCF is constrained by agents’ preference reversals. We provide several alternative formulations of IIM, that clarify both its connection with various parts of the literature (such as Oury and Tercieux (2012)’s Interim Rationalizable Monotonicity, and others), and the source of IIM’s ability to overcome several limitations of the previous conditions in the literature.