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Role of honesty in full implementation

Authors
Journal
Journal of Economic Theory
0022-0531
Publisher
Elsevier
Publication Date
Volume
139
Issue
1
Identifiers
DOI: 10.1016/j.jet.2007.06.006
Keywords
  • Intrinsic Preferences For Honesty
  • Detail-Free Mechanisms
  • Full Implementation
  • Small Fines
  • Permissive Result
Disciplines
  • Design

Abstract

Abstract This paper introduces a new concept of full implementation that takes into account agents’ preferences for understanding how the process concerning honest reporting works. We assume that the agents have intrinsic preferences for honesty in the sense that they dislike the idea of lying when it does not influence their welfare but instead goes against the intention of the central planner. We show that the presence of such preferences functions in eliminating unwanted equilibria from the practical perspective, even if the degree of the preference for honesty is small. The mechanisms designed are detail free and involve only small fines.

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