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HandWiki. Mechanism Design. Encyclopedia. Available online: https://encyclopedia.pub/entry/32910 (accessed on 15 September 2026).
HandWiki. Mechanism Design. Encyclopedia. Available at: https://encyclopedia.pub/entry/32910. Accessed September 15, 2026.
HandWiki. "Mechanism Design" Encyclopedia, https://encyclopedia.pub/entry/32910 (accessed September 15, 2026).
HandWiki. (2022, November 04). Mechanism Design. In Encyclopedia. https://encyclopedia.pub/entry/32910
HandWiki. "Mechanism Design." Encyclopedia. Web. 04 November, 2022.
Mechanism Design
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Mechanism design is a field in economics and game theory that takes an objectives-first approach to designing economic mechanisms or incentives, toward desired objectives, in strategic settings, where players act rationally. Because it starts at the end of the game, then goes backwards, it is also called reverse game theory. It has broad applications, from economics and politics (markets, auctions, voting procedures) to networked-systems (internet interdomain routing, sponsored search auctions). Mechanism design studies solution concepts for a class of private-information games. Leonid Hurwicz explains that 'in a design problem, the goal function is the main "given", while the mechanism is the unknown. Therefore, the design problem is the "inverse" of traditional economic theory, which is typically devoted to the analysis of the performance of a given mechanism.' So, two distinguishing features of these games are: The 2007 Nobel Memorial Prize in Economic Sciences was awarded to Leonid Hurwicz, Eric Maskin, and Roger Myerson "for having laid the foundations of mechanism design theory".

mechanism design game theory goal function

References

  1. In unusual circumstances some truth-telling games have more equilibria than the Bayesian game they mapped from. See Fudenburg-Tirole Ch. 7.2 for some references.
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Update Date: 04 Nov 2022
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