Intuitively, persistent noise counteracts overly high ex post incentives that are present with positive correlation, and in this sense serves as a commitment to lower incentives.
It is shown that this is possible if and only if the SCF is ex-post incentive compatible.
The impossibility result by Jehiel and Moldovanu says that in a setting with interdependent valuations, any efficient and ex-post incentive compatible mechanism must be a constant mechanism.
The CCB-S algorithm produces an ex-post monotone allocation rule that can then be transformed into an ex-post incentive compatible and ex-post individually rational mechanism.
To this end, we consider ex-post incentive compatible mechanisms, which use both players' reports to determine whether or not a merger will take place and what each player will earn in each case.
We show that the optimal deterministic, ex-post incentive compatible, ex-post individual rational mechanism can be computed in polynomial time by reducing the problem to finding a maximal weight closure in a directed graph.
These results are then used to show that, in environments with single-crossing preferences and well-behaved intertemporal effects, strict ex-post incentive compatibility and a condition which limits the strength of preference interdependencies are sufficient to guarantee robust full implementation.
We show that the modified mechanism satisfies ex-ante budget balance as well as ex-post efficiency, periodic ex-post incentive compatibility, and periodic ex-post individual rationality, as long as the Markov chain representing the evolution of players' private information is irreducible and aperiodic and players are sufficiently patient.
Among students with low baseline attendance, the incentive lowered post-incentive attendance, and test scores decreased.
This paper shows that, in comparison to a single-regulator arrangement, when an agent reports to two regulators, he is confronted with more powerful ex-post incentives.
