Nozomu Muto

On efficient partnership dissolution under ex post individual rationality

This paper studies ex post individually rational, efficient partnership dissolution in a setting with interdependent valuations. We derive a sufficient condition that ensures the existence of an efficient dissolution mechanism that satisfies Bayesian incentive compatibility, ex post budget balancedness, and ex post individual rationality. For equal-share partnerships, we show that our sufficient condition is satisfied for any symmetric type distribution whenever the interdependence in valuations is non-positive. This result improves former existence results, demonstrating that the stronger requirement of ex post individual rationality does not always rule out efficiency. We also show that if we allow for two-stage revelation mechanisms, in which agents report their realized payoffs from the allocation, as well as imposing penalties off the equilibrium path, efficient dissolution is always possible even when the interdependence is positive. We further discuss the possibility of efficient dissolution with ex post quitting rights.

Implementation in undominated strategies with partially honest agents

We consider implementation in undominated strategies by bounded mechanisms. We provide a complete characterization of the class of social choice correspondences that are implementable when agents are partially honest, in the sense that they have strict preferences for being sincere when truthfulness does not result in a worse outcome. As an application, we show that the Pareto correspondence is implemented by a finite mechanism.

A decomposition of strategy-proofness

Strategy-proofness has been one of the central axioms in the theory of social choice. However, strategy-proofness often leads to impossibility results. We find that strategy-proofness is decomposed into three axioms: top-restricted AM-proofness, weak monotonicity, and individual bounded response. We present possibility results by dropping individual bounded response from strategy-proofness. One of the results supports the plurality rule which is one of the most widely used rules in practice.

Strategic Complexity in Repeated Extensive Games

This paper studies a machine (finite automaton) playing a two-player repeated game of a simple extensive-form game with perfect information. We introduce a new complexity measure called multiple complexity which incorporates a strategyʼs responsiveness to information in the stage game as well as the number of states of the machine. We completely characterize the Nash equilibrium of the machine game. In the sequential-move prisonerʼs dilemma, cooperation can be sustained as an equilibrium.

An impossibility under bounded response of social choice functions

Abstract We introduce a new axiom called bounded response , which states that for each “smallest” change of a preference profile, the change in the social choice must be “smallest,” if any, for the agent who induces the change in the preference profile. We show that bounded response is weaker than strategy-proofness , and that bounded response and efficiency imply dictatorship. This impossibility has a far-reaching negative implication: on the universal domain of preferences, it is difficult to identify a non-manipulability condition that leads to a possibility result.

A generalization of the Egalitarian and the Kalai–Smorodinsky bargaining solutions

We characterize the class of weakly efficient n-person bargaining solutions that solely depend on the ratios of the players’ ideal payoffs. In the case of at least three players the ratio between the solution payoffs of any two players is a power of the ratio between their ideal payoffs. As special cases this class contains the Egalitarian and the Kalai–Smorodinsky bargaining solutions, which can be pinned down by imposing additional axioms.

Manipulation via Endowments in Auctions with Multiple Goods

We study manipulation via endowments in a market in an auction setting with multiple goods. In the market, there are buyers whose valuations are their private information, and a seller whose set of endowments is her private information. A social planner, who wants to implement a socially desirable allocation, faces the seller’s manipulation via endowments, in addition to buyers’ manipulation of misreporting their valuations. We call a mechanism immune to the seller’s manipulation via endowments destruction-proof. In general, there exists no mechanism which is destruction-proof, together with strategy-proofness of the buyers, efficiency, and participation. Nevertheless, we find a restricted domain of the buyers’ valuation profiles satisfying a new condition called per-capita goods–buyer submodularity. We show that, in this domain, there exists a mechanism which is destruction-proof, together with the above properties. The restriction is likely to be met when each winner’s valuation is close to the next-highest valuation. We also provide a relation to monopoly theory, and argue that per-capita goods–buyer submodularity is independent of the standard elasticity argument.