Abstract
Recently, we find the rise of criticisms in the field of mechanism design, which is to design a mechanism or system for achieving social goals such as efficiency and equity in the distribution of goods and services.
First of all, there is a criticism from experimentalists. In the verification of various mechanisms using human subjects in laboratories, these designed mechanisms do not necessarily function as prescribed. This fact itself is a criticism to not only this particular field, but also extending to economics as a whole. Departing from the initial stage of surprise with why theoretically expected results cannot be observed in laboratories, we are now entering the stage of determining why they do not function and what are the essential factors involved.
Second criticism involves the presumptions in the theories themselves. Mechanism design has not paid sufficient attention to information exchanges between people, the cost of processing, and the selections of equilibrium concepts. What is questioned now is the real validity of frameworks themselves, on which the theories are nested.
This report is, through exploratory works on issues of mechanism design, to contemplate hints of new approaches to the questions: what it means to design a mechanism; how to design them; and what shall be the next step economics needs to aim for.
Research was partially supported by the Grant in Aid for Scientific Research 15310023 of the Ministry of Education, Science and Culture in Japan.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Akai, K., A. Okagawa, T. Kusakawa and T. Saijo (2004): “Designing Domestic Institutions to Cope with Global Warming,” mimeo (in Japanese).
Attiyeh, G., Franciosi, R. and R. M. Isaac (2000): “Experiments with the Pivotal Process for Providing Public Goods,” Public Choice, 102, 95–114.
Cason, T., T. Saijo, T. Sjöström and T. Yamato (2004): “Secure Implementation Experiments: Do Strategy-proof Mechanisms Really Work?” mimeo.
Cason, T., T. Saijo, and T. Yamato (2002): “Voluntary Participation and Spite in Public Good Provision Experiments: An International Comparison,” Experimental Economics, Vol. 5, pp.133–153.
Cason, T., T. Saijo, T. Yamato and K. Yokotani (2004): “Non-Excludable Public Good Experiments,” Games and Economic Behavior, 49 pp.81–102.
Chen, Y. and R. Gazzale (2004): “When Does Learning in Games Generate Convergence to Nash Equilibria? The Role of Supermodularity in an Experimental Setting,” American Economic Review, forthcoming.
Clarke, E. H. (1971): “Multipart Pricing of Public Goods,” Public Choice, 2, 19–33.
Green, J. R. and J.-J. Laffont (1979): Incentives in Public Decision Making, Amsterdam: North-Holland.
Groves, T. (1973): “Incentives in Teams,” Econometrica, 41, 617–31.
Groves, T., and J. O. Ledyard (1977): “Optimal Allocation of Public Goods: A Solution to the ‘Free-Rider’ Problem,” Econometrica, 45, 783–809.
Hamaguchi, Y., T. Saijo, and S. Mitani (2003): “Does the Varian Mechanism Work?: Emissions Trading as an Example” International Journal of Business and Economics, Vol. 2, No. 2, pp.85–96.
Healy, P.J. (2004): “Equilibrium Participation in Public Goods Allocations,” mimeo.
Hurwicz, L. (1979): “Outcome Functions Yielding Walrasian and Lindahl Allocations at Nash Equilibrium Points,” Review of Economic Studies, 46, 217–225.
Johansen, L. (1977): “The Theory of Public Goods: Misplaced Emphasis?,” Journal of Public Economics, Vol.7, 147–152.
Kagel, J. H., R. M. Harstad and D. Levin (1987): “Information Impact and Allocation Rules in Auctions with Affiliated Private Values: A Laboratory Study,” Econometrica, 55, 1275–1304.
Kagel, J. H. and D. Levin (1993): “Independent Private Value Auctions: Bidder Behavior in First-Second-and Third-Price Auctions with Varying Number of Bidders,” Economic Journal, 103, 868–879.
Kawagoe, T. and T. Mori (2001): “Can the Pivotal Mechanism Induce Truth-Telling? An Experimental Study,” Public Choice, 108, 331–354.
Maskin, E. (1977): “Nash Equilibrium and Welfare Optimality,” appeared in Review of Economic Studies, 66,23–38
Saijo, T., and T. Yamato (1999): “A Voluntary Participation Game with a Non-Excludable Public Good,” Journal of Economic Theory, Vol.84, pp.227–242.
Saijo, T., T. Sjöström and T. Yamato (2004): “Secure Implementation,” mimeo.
Samejima, Y. (2003): “Inducing Participation in Lindahl Mechanisms,” mimeo.
Shinohara, R. (2003): “Coalition-proof Equilibria in a Voluntary Participation Game,” mimeo.
Shinohara R. (2004): “Strong Equilibrium in a Participation Game with a Discrete Public Good”, mimeo.
Varian, H. R. (1994): “A Solution to the Problem of Externalities When Agents Are Well-Informed,” American Economic Review, 84, 1278–1293.
Walker, M. (1980): “On the Nonexistence of a Dominant Strategy Mechanism for Making Optimal Public Decisions,” Econometrica, 48, 1521–1540.
Yu, Z. (2001): “A Strategic Trade and Environmental Policy: Argument for the Kyoto Protocol,” mimeo.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2007 Springer-Verlag Berlin Heidelberg
About this chapter
Cite this chapter
Saijo, T. (2007). Design Science: A Prelude. In: Oda, S.H. (eds) Developments on Experimental Economics. Lecture Notes in Economics and Mathematical Systems, vol 590. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-68660-6_8
Download citation
DOI: https://doi.org/10.1007/978-3-540-68660-6_8
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-68659-0
Online ISBN: 978-3-540-68660-6
eBook Packages: Business and EconomicsEconomics and Finance (R0)