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Virtual Implementation in Backwards Induction

By Jacob Glazer and Motty Perry


Abstract: We examine a sequential mechanism which is a simple modification of the normal form mechanism introduced by Abreu and Matsushima (1992). We show that almost any social choice function can be virtually implemented via a finite sequential game of perfect information. The solution concept assumed is Subgame Perfect Equilibrium or Iterative Elimination of Strictly Dominated Strategies. In particular, any social choice function that is virtually implementable via the Abreu-Matsushima’s mechanism is also virtually implementable by a sequential mechanism

Year: 1996
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