Sequential Preference Revelation in Incomplete Information Settings
Rodrigo A. Velez
- American Economic Journal: Microeconomics (Forthcoming)
Strategy-proof allocation rules incentivize truthfulness in simultaneous
move games, but real world mechanisms sometimes elicit preferences
sequentially. Surprisingly, even when the underlying rule is
strategy-proof and non-bossy, sequential elicitation can yield equilibria
where agents have a strict incentive to be untruthful. This occurs only
under incomplete information, when an agent anticipates that truthful
reporting would signal false private information about others’ preferences.
We provide conditions ruling out this phenomenon, guaranteeing
all equilibrium outcomes to be welfare-equivalent to truthful ones.
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