Evidence Based Mechanisms

Résumé

We study implementation with privately informed agents who can produce evidence. We define evidence based mechanisms as mechanisms such that the designer’s contingent plan of action is consistent with available evidence, and characterize the social choice functions that are straightforwardly implementable by such mechanisms. Our results imply that any function that is implementable with transfers is also implementable with sufficient evidence. With private values, the efficient outcome is ex post implementable with budget balanced and individually rational transfers. In single-object auction and bilateral trade environments with interdependent values, the efficient allocation is implementable with budget balanced and individually rational transfers.