Worst - case mechanism design with undominated strategies ∗ Takuro Yamashita

We consider a way to evaluate mechanisms without assuming mutual knowledge of rationality among the agents. More specifically, we assume that each agent can take any undominated strategy under a mechanism, and the mechanism is evaluated by its worst-case scenario. First, we provide some characteristics of a mechanism that implements a “strongly monotonic” social choice correspondence in an environment with “single-crossing” preferences. Second, we show that if the mechanism designer is interested in implementation of “individually rational outcome mappings” in a “random valuation” model, any mechanism that is not dominant-strategy incentive compatible (DSIC) is outperformed by a DSIC mechanism.