Axiom Content: Robustness to Strategizing

Abstract

Understanding how robust a rule is to people’s attempts to affect their assignments in their own favor by being strategic instead of doing what they’re asked to do, is an important part of the research program on economic design. We can’t ignore strategic behavior. Each participant has some influence over the choices that are made by exploiting the information they hold privately concerning a variety of data about the situation and that is needed to calculate the outcomes recommended by a rule. This information certainly concerns them, primarily their preferences, but they can also exercize their influence through the resources they control. A rule should give participants the incentive to be truthful about this information and to not exercise this control. “Incentive-compatible” is the general term that is used to designate rules that do. But there’re many ways in which someone may be strategic, and to each of them corresponds a requirement of immunity of a rule to the behavior. We’ll review them here. We’ll also propose ways of assessing the manipulability of a rule and ways of circumventing manipulation through what’s called “implementation”.