Mechanism Design with Moral Bidders

A rapidly growing literature on lying in behavioral economics and psychology shows that individuals often do not lie even when lying maximizes their utility. In this work, we attempt to incorporate these findings into the theory of mechanism design. We consider players that have a preference for truth-telling and will only lie if their benefit from lying is sufficiently larger than the loss of the others. To accommodate such players, we introduce $\alpha$-moral mechanisms, in which the gain of a player from misreporting his true value, comparing to truth-telling, is at most $\alpha$ times the loss that the others incur due to misreporting. We develop a theory of moral mechanisms in the canonical setting of single-item auctions. We identify similarities and disparities to the standard theory of truthful mechanisms. In particular, we show that the allocation function does not uniquely determine the payments and is unlikely to admit a simple characterization. In contrast, recall that monotonicity characterizes the allocation function of truthful mechanisms. Our main technical effort is invested in determining whether the auctioneer can exploit the preference for truth-telling of the players to extract more revenue comparing to truthful mechanisms. We show that the auctioneer can extract more revenue when the values of the players are correlated, even when there are only two players. However, we show that truthful mechanisms are revenue-maximizing even among moral ones when the values of the players are independently drawn from certain identical distributions. As a by product we get an alternative proof to Myerson's characterization in the settings that we consider. We flesh out this approach by providing an alternative proof to Myerson's characterization that does not involve moral mechanisms whenever the values are independently drawn from regular distributions

A Semantic Approach to the Completeness Problem in Quantum Mechanics

The old Bohr-Einstein debate about the completeness of quantum mechanics (QM) was held on an ontological ground. The completeness problem becomes more tractable, however, if it is preliminarily discussed from a semantic viewpoint. Indeed every physical theory adopts, explicitly or not, a truth theory for its observative language, in terms of which the notions of semantic objectivity and semantic completeness of the physical theory can be introduced and inquired. In particular, standard QM adopts a verificationist theory of truth that implies its semantic nonobjectivity; moreover, we show in this paper that standard QM is semantically complete, which matches Bohr's thesis. On the other hand, one of the authors has provided a Semantic Realism (or SR) interpretation of QM that adopts a Tarskian theory of truth as correspondence for the observative language of QM (which was previously mantained to be impossible); according to this interpretation QM is semantically objective, yet incomplete, which matches EPR's thesis. Thus, standard QM and the SR interpretation of QM come to opposite conclusions. These can be reconciled within an integrationist perspective that interpretes non-Tarskian theories of truth as theories of metalinguistic concepts different from truth.Comment: 19 pages. Further revision. Proof of Theorem 3.2.1 simplified, Section 3.5 amended, minor changes in several sections. Accepted for publication in Foundations of Physic