Locally robust implementation and its limits

Philippe Jehiel (1, 2, 3) , Moritz Meyer-Ter-Vehnc (4) , Benny Moldovanu (5)

1 PSE - Paris-Jourdan Sciences Economiques
2 PSE - Paris School of Economics
3 UCL - University College of London [London]
4 UCLA - University of California [Los Angeles]
5 University of Bonn

We study a notion of locally robust implementation that captures the idea that the planner may know agentsʼ beliefs well, but not perfectly. Locally robust implementation is a weaker concept than ex-post implementation, but we show that no regular allocation function is locally robust implementable in generic settings with quasi-linear utility, interdependent and bilinear values, and multi-dimensional payoff types.

Keywords: Robust implementation; Interdependent values; Multi-dimensional types; Perturbed beliefs

Domains: Humanities and Social Sciences; Economics and Finance

Philippe Jehiel, Moritz Meyer-Ter-Vehnc, Benny Moldovanu. Locally robust implementation and its limits. Journal of Economic Theory, 2012, 147 (6), pp.2439-3452. ⟨10.1016/j.jet.2012.05.012⟩. ⟨hal-00813046⟩