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Adaptive dynamics and the implementation problem with complete information

Antonio Cabrales

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: This paper studies the equilibrating process of several implementation mechanisms using naive adaptive dynamics. We show that the dynamics converge and are stable, for the canonical mechanism of implementation in Nash equilibrium. In this way we cast some doubt on the criticism of ``complexity'' commonly used against this mechanism. For mechanisms that use more refined equilibrium concepts, the dynamics converge but are not stable. Some papers in the literature on implementation with refined equilibrium concepts have claimed that the mechanisms they propose are ``simple'' and implement ``everything'' (in contrast with the canonical mechanism). The fact that some of these ``simple'' mechanisms have unstable equilibria suggests that these statements should be interpreted with some caution.

Keywords: Implementation; bounded rationality; evolutionary dynamics; mechanisms (search for similar items in EconPapers)
JEL-codes: C72 D70 D78 (search for similar items in EconPapers)
Date: 1996-07
New Economics Papers: this item is included in nep-evo and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Adaptive Dynamics and the Implementation Problem with Complete Information (1999) Downloads
Working Paper: Adaptive Dynamics and the Implementation Problem with Complete Information Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:179

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